General Mills Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component General Mills (NYSE:GIS) will unveil its latest earnings on Wednesday, June 27, 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 58 cents per share, a rise of 11.5% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. For the year, analysts are projecting net income of $2.54 per share, a rise of 2.4% from last year.

Past Earnings Performance: The company is hoping to beat estimates after missing the mark for two straight quarters. Last quarter, it reported profit of 55 cents per share against an estimate of net income of 56 cents per share. The quarter before that, it missed forecasts by 3 cents.

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Wall St. Revenue Expectations: On average, analysts predict $4.11 billion in revenue this quarter, a rise of 13.2% from the year-ago quarter. Analysts are forecasting total revenue of $16.69 billion for the year, a rise of 12.2% from last year’s revenue of $14.88 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.0 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

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.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 1.8% in the fourth quarter of the last fiscal year, 8.9% in the first quarter and 13.7% in the second quarter before increasing again in the third quarter.

After experiencing income drops the past three quarters, the company is hoping to use this earnings announcement to rebound. Net income fell 14.1% in the first quarter, by 27.5% in the second quarter and again in the third quarter.

The company’s gross margin shrank by 2.7 percentage points in the in the third quarter. Revenue rose 13% while cost of sales rose 17.9% to $2.61 billion from a year earlier.

Stock Price Performance: Between March 27, 2012 and June 21, 2012, the stock price fell 75 cents (-1.9%), from $39.11 to $38.36. It saw one of its worst periods between May 25, 2012 and June 5, 2012 when shares fell for seven straight days, dropping 3.3% (-$1.28) over that span. 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.

A Look Back: In the third quarter, profit fell 0.2% to $391.5 million (58 cents a share) from $392.1 million (59 cents a share) the year earlier, missing analyst expectations.

Competitors to Watch: Ralcorp Holdings, Inc., Kellogg, Kraft Foods, ConAgra Foods, The Hain Celestial Group, Inc., and TreeHouse Foods Inc.

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

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