Cereal maker General Mills
What analysts say:
- Buy, sell, or waffle? There are 20 analysts baking up predictions about the General, and 13 of them say hold, six say buy, and only one has burned the cookies with a sell rating.
- Revenue. Sales are expected to puff up by 5%, rising to $2.99 billion.
- Earnings. Profits are also expected to grow, up 3.3% to $0.63 per share.
What management says:
With cereal being the grist for the company's profit mill, General Mills has embarked on a risky strategy to boost earnings by churning out a higher volume of the breakfast product with lower prices. It's a dicey maneuver, because there are many players who might not cooperate.
As wheat prices reached a 10-year high of $6 a bushel, competitors such as Kellogg's
Grocery stores like Kroger
What management does:
While the battle of the breakfast cereals may have made it look like General Mills wasn't eating its Wheaties, much of the rest of the business was running strong. International sales, for example, have risen 15% with operating margins up 7% for the first nine months of the year. Cash flows are also robust, with basic free cash flows at more than $900 million, and the company has once again increased its dividend.
02/06 |
05/06 |
08/06 |
11/06 |
02/07 |
|
---|---|---|---|---|---|
Gross |
36.7% |
40.2% |
40.1% |
40.2% |
40.3% |
Operating |
18.6% |
17.7% |
18.0% |
18.1% |
18.2% |
Net |
11.5% |
9.4% |
9.3% |
9.3% |
9.4% |
One Fool says:
General Mills is more than just cereals; it also competes with Kraft
Related Foolishness:
General Mills has earned a three-star rating from Motley Fool CAPS, the new investor intelligence community. You can add your voice to the new stock-rating service by joining today. It's free!
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Fool contributor Rich Duprey owns shares of Wal-Mart but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.