Upcoming AWS Coverage on Conagra Brands Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 27, 2016 / Active Wall St. announces its post-earnings coverage on General Mills, Inc. (NYSE: GIS). The Company reported its second quarter fiscal 2017 financial results on December 20, 2016. The consumer foods giant's earnings and sales number came in below market expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of General Mills' competitors within the Processed & Packaged Goods space, Conagra Brands, Inc. (NYSE: CAG), reported of December 22, 2016, its results for the fiscal 2017 second quarter ended November 27, 2016. AWS will be initiating a research report on Conagra Brands in the coming days.

Today, AWS is promoting its earnings coverage on GIS; touching on CAG. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=GIS

http://www.activewallst.com/registration-3/?symbol=CAG

Earnings Reviewed

For the three months ended on November 27th, 2016, General Mills reported net sales of $4.11 billion, down 7% from $4.42 billion in Q2 FY16 due to lower organic net sales and the divestiture of the North American Green Giant business. The Company's revenue number missed analysts' estimates of $4.22 billion. General Mills' organic net sales declined 4% on a y-o-y basis, with volume reductions in the US Retail and International segments partially offset by benefits from positive net price realization and mix.

During Q2 FY17, General Mills' gross margin increased 220 basis points to 37.0% of net sales, reflecting benefits from cost savings initiatives, favorable mark-to-market effects, and lower restructuring expenses. The Company's adjusted gross margin, which excludes certain items affecting comparability, increased 130 basis points on a y-o-y basis to 36.8%, driven by cost savings efforts more than offsetting benign input cost inflation.

General Mills Q2 FY17 operating profit totaled $769 million, down 15% from year-ago levels that included a gain from the divestiture of Green Giant in North America. Operating profit margin of 18.7% was down 180 basis points as compared to operating profit margin of 20.5% in Q2 FY16. Adjusted operating profit margin increased 160 basis points to 19.6%, reflecting higher gross margins and a 20% reduction in media and advertising expense.

Net earnings attributed to General Mills in the reported quarter totaled $482.8 million, dropping 9% from net earnings attributed to the Company of $529.5 million in the year ago same period. The Company's diluted EPS totaled $0.80, down 8% from diluted EPS of $0.87 in the year earlier comparable quarter. General Mills' adjusted diluted EPS, which excludes certain items affecting comparability of results, totaled $0.85 in Q2 FY17, up 4% from adjusted diluted EPS of $0.82, but fell short of Wall Street's projections of $0.86 per share.

Segment Results

Q2 FY17, General Mills' U.S. Retail segment's net sales totaled $2.52 billion, down 8.7% from net sales of $2.76 billion in the prior year with an increase in the Snacks operating unit which was more than offset by declines in the other units. The segment's operating profit increased 2.5% on a y-o-y basis to $615.4 million, primarily driven by benefits from cost savings initiatives and a decrease in media and advertising expense.

International Segment

Net sales for General Mills' International segment in Q2 FY17 totaled $1.10 billion, down 5% from the prior year's nets sales of $1.16 billion, driven primarily by foreign exchange headwinds and the divestiture of Green Giant in Canada. The Company's International segment operating profit declined 22% to $105.9 million in constant currency, reflecting currency-driven inflation on products imported into Canada and the UK, as well as the Green Giant divestiture.

In the reported quarter, net sales for General Mills' Convenience Stores and Foodservice segment declined 4% to $488 million from $505.8 million in the year earlier quarter, with increases for the yogurt, mixes, and cereal platforms offset by market index pricing on bakery flour. The segment's operating profit increased 6% in Q2 FY17 to $109.1 million, reflecting benefit from cost savings initiatives, lower input costs, and higher grain merchandising earnings.

Balance Sheet

In Q2 FY17, General Mills' cash provided by operating activities totaled $988 million through six months, down 15% from the prior year due to changes in trade and advertising accruals and changes in income taxes payable. The Company's capital investments through H1 totaled $318 million. During the first half of 2017, General Mills repurchased 20.5 million shares of common stock for a total of $1.35 billion.

Outlook

For FY17, General Mills is forecasting organic net sales to decline between 3% and 4% compared to the earlier forecast of flat to down 2%. The Company's constant-currency total segment operating profit is now expected to increase 2% to 4% in FY17, reduced from previous guidance of 6% to 8% growth due to lower sales expectations. General Mills maintained its targets for adjusted operating profit margin expansion of approximately 150 basis points and constant-currency adjusted diluted EPS growth of 6% to 8% from the base of $2.92 earned in FY16.The Company now expects free cash flow to increase at a high single-digit rate, up from previous guidance of mid-single-digit growth driven by accelerated progress on core working capital management.

Stock Performance

At the closing bell, on Friday, December 23, 2016, General Mills' stock slightly dropping 0.48%, ending the trading session at $62.16. A total volume of 1.46 million shares were traded at the end of the day. In the last twelve months, shares of the company have advanced 9.00%. Moreover, the stock surged 11.01% since the start of the year. The stock is trading at a PE ratio of 23.13 and has a dividend yield of 3.09%.

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SOURCE: Active Wall Street