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Food manufacturing giants ConAgra and General Mills reported double-digit drops in their fiscal second quarters, with margins suffering due to higher costs. Both groups however reiterated their full-year forecasts, saying they expect better results in the second half of the year.
General Mills saw its net profit slump by 28% to $444.8m, although excluding costs related to its Yoplait yogurt unit acquisition, per-share earnings were flat. Overall sales were up a strong 14% to $4.62bn, helped partly by higher prices, although volumes were down 2% in the US.
Meanwhile, ConAgra saw its net profit drop by 14.5% to $171.8m, due to restructuring charges and hedging losses. However, revenue was up 8.1% to $3.4bn, despite volumes declining by 1%.
The companies said most of their price hikes for the year have taken place, adding that they expect volumes to improve in the second half. They also plan to boost marketing and introduce a slew of new products.
NamNews - Wednesday 21st December 2011
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