General Mills beats by $0.01, reports revs in-line; guides FY18 EPS below consensus
- Reports Q3 (Feb) earnings of $0.79 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.78; revenues rose 2.3% year/year to $3.88 bln vs the $3.87 bln Capital IQ Consensus.
- Adjusted operating profit margin decreased 120 basis points to 15.7 percent, primarily reflecting lower adjusted gross margin, partially offset by lower selling, general, & administrative expense (SG&A), including a 22 percent decrease in advertising and media expense.
- Co issues downside guidance for FY18, sees EPS of $3.08-3.11, excluding non-recurring items, vs. $3.17 Capital IQ Consensus Estimate.
- Organic net sales are expected to be in line with last year, which is unchanged from previous guidance. This represents a 400 basis point improvement over the fiscal 2017 growth rate.
- Constant-currency total segment operating profit is now expected to decline 5-6 %, compared to the previous expectation of a range between down 1% and flat. The change in outlook was driven by higher-than-expected supply chain costs, including freight and logistics, commodities, and other operational costs
- Constant-currency adj. EPS is now expected to range b/t flat and up 1% from the base of $3.08 earned in fiscal 2017, compared to the previous guidance of a 3-4% increase. The company now estimates currency translation will be a 3 cent benefit to FY 18 adj. EPS.
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