In preparation for its annual shareholders meeting on Monday, 25 September, General Mills, Inc. (NYSE: GIS) released Q1 2007 earnings on Thursday 21 September. Overall results were good. Cereal sales for the quarter were higher helping to push net income up 6% to $267 million, equivalent to 74 cents per share. Q1 2006 figures were $252 million in net income, or 64 cents per share. Net sales for the quarter were also up almost 7% to $2.86 billion. Despite a 9% increase in operating profit for the US, General Mills experienced a 5% decline in its international markets due in large measure to additional marketing expenses to introduce and support new products.
Despite higher raw materials costs, the cereals, bakeries and food service divisions all posted increases in operating profit margins. Higher raw materials costs have also hit General Mills' closest competitors, Kellogg and Kraft Foods. General Mills spent $58 million in acquisitions this quarter. It also introduced a new product, Fruity Cheerios, to compete against Kellogg's Fruit Loops. General Mills also own Progresso soup, a direct competitor of Campbell's Soup, and Yoplait yogurt. The current dividend yield on General Mills stock is 2.6%.