On June 29, General Mills (NYSE:GIS) released annual earnings for the period ended May 28.

  • Sales exceeded expectations, and -- when adjusted for $0.08 per share in potential dilution from convertible debt -- EPS also met expectations.
  • 2006 earnings declined versus 2005, but 2005 numbers contain one-time gains from sales of assets. Adjusted for those gains, earnings increased slightly. Cash from operations and free cash flow also improved.
  • General Mills repurchased 19 million shares during the fiscal year, which helped to reduce diluted share count by 7.3%

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

FY 2006

FY 2005

Change

Sales

$11,590

$11,640

$11,244

3.5%

Net Profit

--

$1,090

$1,240

(12.1%)

EPS

$2.98

$2.90

$3.08

(5.8%)

Diluted Shares

379

409

(7.3%)



Get back to basics with a look at the income statement.

Margin Checkup

FY 2006

FY 2005

Change*

Gross Margin

40.15%

39.22%

0.93

EBT margin**

13.46%

16.14%

(2.68)

Net Margin

9.36%

11.03%

(1.67)

*Expressed in percentage points.
**Excludes Earnings from Joint Ventures

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

FY 2006

FY 2005

Change

Cash + ST Invest.

$647

$573

12.9%

Accounts Rec.

$1,076

$1,034

4.1%

Inventory

$1,055

$1,037

1.7%



Liabilities

FY 2006

FY 2005

Change

Accounts Payable

$1,151

$1,136

1.3%

Long-Term Debt

$2,415

$4,255

(43.2%)



Learn the ways of the balance sheet.

Cash Flow Highlights

FY 2006

FY 2005

Change

Cash From Ops.

$1,771

$1,711

3.5%

Capital Expenditures

$360

$414

(13.0%)

Free Cash Flow

$1,411

$1,297

8.8%



Find out why Fools always follow the money.

Related Companies:

  • Kellogg Co. (NYSE:K)
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  • ConAgra (NYSE:CAG)
  • Group Danone (NYSE:DA)
  • Pepsico (NYSE:PEP)

Kraft is a Motley Fool Income Investor selection.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication,Nathan Parmelee had no positions in any of the companies mentioned. Fool rules are here.