General Mills Q1 profits leap 51 percent

Profits at Minneapolis-based General Mills have soared by 51 percent in the first quarter, it was announced today. For the quarter ending August 30, General Mills posted profits of $420 million, up from $278 million a year before. Sales at its US retail business rose 5.8 percent and profit by 21 percent. The higher than expected profits were helped by strong sales of breakfast cereals in the US and a decline in wheat prices. The company has also recently embarked on a number of cost-cutting measures, which also boosted earnings. General Mills is the maker of Cheerios, Fiber One and Trix cereals, as well as other household names such as Pillsbury cookie dough and Hamburger Helper. It recently introduced a number of new products to help drive retail growth in the US, such as Progresso soups. Food manufacturers were hit hard last year by sky-high raw material costs as commodity prices soared. Now that they have begun to fall, companies are starting to see the benefit in their profit margins. Profit has also been helped by a rise in the number of consumers choosing to eat in and save money as a result of the global recession. Chairman and CEO Ken Powell said: ÔÇ£WeÔÇÖre very pleased with this start to the year. WeÔÇÖre seeing continuing strong consumer demand for our products. These good sales levels, combined with the effects of our companywide focus on holistic margin management (HMM), are driving terrific operating performance in our manufacturing plants.  ÔÇ£In addition, our commodity and fuel costs for the quarter were below year-ago levels, helping us to recover margin that was lost in the same quarter last year. These factors drove first-quarter earnings growth that was well ahead of our expectations.ÔÇØ  Headquartered in Golden Valley, Minnesota, General Mills markets several well-known brands including Yoplait, Old El Paso and Lucky Charms. It employs just under 30,000 people worldwide. * ┬á┬á┬á┬á┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á *