This article was originally published by GuruFocus
By Sarfaraz A. Khan, Research Assistant: Gohar Yousuf
By Sarfaraz A. Khan, Research Assistant: Gohar Yousuf
March 7, 2014
In a recent analyst conference, General Mills (GIS) has reaffirmed its earnings guidance for the current fiscal year. The company will report its next quarterly results on March 19 in which its earnings could come under additional pressure due to two new developments. The company could witness an increase in input costs coming from a lack of genetically modified ingredients and the increasing futures of oat prices.
In a recent analyst conference, General Mills (GIS) has reaffirmed its earnings guidance for the current fiscal year. The company will report its next quarterly results on March 19 in which its earnings could come under additional pressure due to two new developments. The company could witness an increase in input costs coming from a lack of genetically modified ingredients and the increasing futures of oat prices.
The company has struggled with growth
recently but it has outperformed its competitors. General Mills generates solid
free cash flow and therefore, has been able to aggressively grow its dividend
over the years. The company offers an attractive yield of 3%, which is above
the industry’s average of 2.22%.
Future Outlook
General Mills has reaffirmed its
fiscal 2014 guidance. The company is expecting earnings of between $2.87 and
$2.90 per share. The company, however, has warned investors that the Venezuelan
currency devaluation could have an adverse impact on its profits. In that case,
the company has forecast that it would meet the low end of its guidance.
No
Genetically Modified Ingredients
The company has responded to the
criticism related to its use of genetically modified ingredients in its cereal
by opting to remove such ingredients. The business, however, has failed to
win over its critics. Investors should note that this decision could lead to an
increase in the price of its cereals.
Last month, the company declared that it has
stopped using genetically modified ingredients in …. Read full article at
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