US cereal maker General Mills has reported a 24% rise in quarterly net earnings despite challenging conditions.

The company posted net earnings of US$278m for the fourth quarter to 30 May compared to $225m in the year-ago period. Net sales were up 10% for the quarter to $2.79bn.

For the full year, the company reported a 15% rise in net earnings to $1.055bn, while net sales rose 5% to $11.07bn.

“General Mills posted good sales and earnings gains in 2004, despite the challenges of rising commodity costs, increasing employee benefits expense, and the recent popularity of low-carbohydrate diets, which slowed sales in several of our major product categories,” said chief executive Steve Sanger.

“Our businesses generated strong cash flow, which enabled us to make capital investments that will support future business growth and productivity savings. At the same time, we paid down $572m of debt, exceeding our $450m debt-reduction goal for the year,” he added.

The company is expecting higher commodity costs in 2005, which it expects to offset through stronger levels of product innovation, company-wide productivity and cost-saving initiatives, and selected price increases.