Cereal company General Mills has said it expects an increase in net earnings for the second quarter. It is due to announce second quarter results on 22 December.
The company said that while second-quarter segment operating profits will be below strong prior-year levels, second-quarter net earnings are expected to increase to between US$0.96 and $0.97 a share, including an estimated 4 to 5 cents of dilution associated with accounting for contingently convertible debt.
“Our first-half performance is running ahead of plan, which gives us the opportunity to further increase shareholder dividends this year, while we also reinvest some of our earnings in brand-building marketing programs,” said General Mills chairman and chief executive officer Steve Sanger. “Our earnings expectations for the second half include significant year-over-year increases in consumer marketing expense and input costs. But based on our good first-half performance, we are modestly raising 2006 earnings guidance to a range of $2.80 to $2.85 per share, including an estimated 8 cents of dilution associated with accounting for contingently convertible debt.”
Previously, the company’s 2006 guidance was for earnings of $2.78 to $2.83 per share, including an estimated 7 cents of dilution associated with accounting for contingently convertible debt.”
The General Mills board of directors has approved an increase in the company’s quarterly dividend to $34 cents per share, payable on 1 February 2006. The previous quarterly dividend rate of 33 cents per share was established effective with the 1 August 2005 payment and represented a 6% increase over the quarterly dividend rate paid in General Mills’ 2005 fiscal year.
