Earnings preview: Will General Mills top estimates?

Still, keeping up with estimates will be a treat to some degree. We've been hearing a lot about how supermarket shoppers are getting tired of paying top prices for premium brands. They want better deals. They can get them with private-label stock. Then again, private brands aren't necessarily better products. Sometimes they are, but really, can any generic cereal compare to one of General Mills' products? In my opinion, no. However, my opinion doesn't matter. People need to make their dollar stretch further, and if buying a store brand saves them money, they'll do it. Look at Wal-Mart Stores, Inc. (NYSE: WMT). The retailer wants to use the recession to its advantage by aggressively pursuing opportunities in its private-label portfolio. Something like that simply makes it tough for a General Mills to engage growth in the bottom line. Management will hopefully thoroughly comment on the issue of generic competition.

I think there's a decent chance that General Mills will top estimates this week. Judging from its earnings history, the company does have a habit of being a winner in the analyst game. However, it isn't unheard of for General Mills to meet expectations, either. I've been dead against most earnings trades, and even though I think, after taking everything into account (especially the recent improvement in market sentiment), that General Mills probably would be one of the better earnings bets out there, I'll stick to my guns and avoid buying ahead of the report. Like I've said all along, this market is just too risky to fool around with.

Disclosure: I don't own any company mentioned; positions can change without notice.