General Mills Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component General Mills (NYSE:GIS) will unveil its latest earnings on Wednesday, December 19, 2012. General Mills is a manufacturer and marketer of branded consumer foods sold through retail stores. It also supplies branded and unbranded food products to the food service and commercial baking industries.

General Mills Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 79 cents per share, a rise of 3.9% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 80 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 79 cents during the last month. Analysts are projecting profit to rise by 3.9% versus last year to $2.66.

Past Earnings Performance: The company has beaten estimates the last two quarters and is coming off a quarter where it topped the forecasts by 4 cents, reporting net income of 66 cents per share against a mean estimate of profit of 62 cents. In the fourth quarter of the last fiscal year, the company exceeded forecasts by 2 cents with net income of 60 cents versus a mean estimate of profit of 58 cents.

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A Look Back: In the first quarter, profit rose 35.3% to $548.9 million (82 cents a share) from $405.6 million (61 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 5.3% to $4.05 billion from $3.85 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.87 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company regressed in this liquidity measure from 0.96 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 55.5% to $5.98 billion while assets rose 41.3% to $5.22 billion.

Wall St. Revenue Expectations: Analysts are projecting a rise of 5.6% in revenue from the year-earlier quarter to $4.88 billion.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 13.7% in the second quarter of the last fiscal year, 13% in the third quarter of the last fiscal year and 11.9% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

There has enjoyed solid performance recently heading into this earnings announcement with profit rising by a year-over-year average of 2.3% for the last four quarters.

Stock Price Performance: From November 14, 2012 to December 13, 2012, the stock price rose $1.63 (4.1%), from $39.86 to $41.49. The stock price saw one of its best stretches over the last year between June 11, 2012 and June 19, 2012, when shares rose for seven straight days, increasing 2.3% (+89 cents) over that span. It saw one of its worst periods between September 20, 2012 and September 28, 2012 when shares fell for seven straight days, dropping 1.5% (-59 cents) over that span.

Analyst Ratings: With 12 analysts rating the stock a buy, none rating it a sell and five rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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