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.
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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.
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