General Mills (GIS 0.81%) will release its quarterly report on Wednesday, and the cereal company climbed to all-time record highs last month as investors gravitated to the secure, dependable stocks that deliver through good times and bad. But as dependable as General Mills earnings may be, will the company be able to grow faster in order to support further share-price gains in the future?

As the purveyor of well-known brands like Wheaties, Cheerios, and Pillsbury, General Mills didn't lack for brand recognition. But the company has gotten a lot more attention this year, both because of the drive toward more defensive stocks as well as from acquisition activity in the industry. That level of scrutiny is unusual for General Mills, especially given the industry's reputation as featuring slow growth and a lack of catalysts to drive future gains. Can the cereal giant buck the odds? Let's take an early look at what's been happening with General Mills over the past quarter and what we're likely to see in its report.

Stats on General Mills

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$4.30 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

How will General Mills earnings fare this quarter?
Analysts have very modestly trimmed their views on General Mills earnings in recent months, cutting both August-quarter and current fiscal-year estimates by a penny per share. The stock has climbed 4% since mid-June but has given back some of its greater gains from a month ago.

General Mills has emphasized new product launches lately as part of its overall growth strategy. The company rolled out its Cookies 'n Crème cereal product, on which it's partnering with Hershey (HSY -0.09%) to leverage the value of the Hershey brand name. In addition, General Mills is working with Swiss giant Nestle to boost international sales, with a joint venture targeting cereal sales in 130 nations worldwide.

But competition has been increasingly fierce in the food industry. Kellogg (K 0.06%) has managed to get attractive growth from its acquisition of the Pringles potato-chip line last year, aiming to boost its offerings of non-cereal products. Similarly, even though ConAgra's (CAG -0.51%) purchase of Ralcorp toward the end of last year helped it boost its cereal offerings, one of the biggest virtues of the deal was to give ConAgra greater presence in the private-label market. General Mills has to step up to make sure that it can keep track with these hard-working rivals.

In July, Starbucks (SBUX 1.88%) teamed up with yogurt giant Danone to come up with an exclusive yogurt line for its Evolution Fresh brand, challenging General Mills' Yoplait segment. Combined with pressure that Yoplait has faced in being late to the Greek yogurt craze, General Mills risks missing some of the rare high-growth opportunities the food industry has produced lately.

General Mills also has to be careful to protect its reputation. Just earlier this month, General Mills chose to recall one line of its Pillsbury cinnamon rolls, citing the potential for broken plastic within the production line. Despite only a limited quantity of the product being at any danger of contamination, such incidents can cause damage to food companies' reputations if they occur with any regularity.

In the General Mills earnings report, watch closely to see if the company can keep its sales growth moving forward without sacrificing profits. Any damage to margins resulting from changes in food-input costs could create a roadblock to future earnings growth as well.

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