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General Mills stock falls despite Q2 top and bottom line beat, raised earnings outlook

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General Mills Inc.’s stock fell 3.3% before market open Tuesday despite second-quarter results that beat analysts’ top and bottom line estimates.

The food giant reported second-quarter profit of $605.9 million, or $1.01 a share, compared with $597.2 million, or 97 cents a share, in the year-ago period. General Mills’
adjusted earnings were $1.10 a share, compared with 99 cents a share in the same period last year. Analysts surveyed by FactSet were looking for earnings of $1.07 a share.

The company’s second-quarter revenue was $5.22 billion, compared with $5.02 billion in the prior year’s quarter. Analysts surveyed by FactSet were looking for sales of $5.19 billion.

See Now: General Mills profit beats estimate, raises outlook

“We continued to execute well and delivered strong top and bottom-line growth in the second quarter,” said General Mills CEO Jeff Harmening, in a statement. The CEO acknowledged “ongoing volatility in the operating environment” but said that General Mills remains focused on driving Accelerate, the growth strategy it launched in early 2021.

General Mills raised its 2023 adjusted earnings outlook to growth of 3% to 5%, from its earlier forecast of 0% to 3%. The company also hiked its 2023 estimate for adjusted earnings per share to 4% to 6% from its earlier view of 2% to 5%, citing better performance and price mix. The updated outlook reflects stronger adjusted operating profit growth and higher net interest expense due to increasing rates, the company said, in its statement.

The Cheerios maker has risen 29.3% this year, outpacing the S&P 500 Index’s
decline of 19.9%.

Related: General Mills’ new growth strategy will focus on categories including cereal, pet food and ice cream

Of 20 analysts surveyed by FactSet, two have a buy rating, 15 have a hold rating, and three have an underweight or sell rating for General Mills.


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