NEW YORK (AP) — A quarterly revenue shortfall and a disappointing outlook for the year led several analysts to trim their outlooks for General Mills Inc. early Thursday.
The Minneapolis-based packaged food maker posted adjusted profit for the fiscal fourth quarter on Wednesday that was a penny higher than Wall Street expectations. But the company also said it expects adjusted net income to be $2.65 per share for its fiscal 2013.
That's shy of the $2.76 analysts were forecasting, according to FactSet.
Revenue climbed 12 percent to $4.07 billion from a year ago but was still short of Wall Street expectations of $4.12 billion.
Jefferies analyst Scott Mushskin was among those who subsequently lowered his adjusted net income for fiscal 2013. He now expects profit of $2.64, down 12 cents. His estimate for 2014 was lowered to $2.82, down 13 cents.
BMO Capital Markets, Citi Investment Research and others took similar actions. The average forecast for the fiscal 2013 is now down to $2.68, and for 2014 dropped to $2.89 from $2.97 per share, according to FactSet.
Jefferies' Mushkin noted that General Mills faces major challenges, despite the restructuring and innovation plans laid out by management. For example, the company plans to roll out dozens of new products for its Yoplait brand, which has been struggling in the U.S. amid soaring popularity of Greek yogurt. Yoplait sales fell 4 percent for the year.
But Mushkin said he doesn't believe that Yoplait unit "is the right vehicle to compete in the U.S. Greek yogurt business."
In a note to investors, Janney analyst Jonathan Feeney also said that lower ad spending could further hurt the company's brands. In the company's fiscal 2012, U.S. retail sales rose 3 percent, driven by results in its Big G Cereal, snacks and natural and organic foods units, which partially offset the decline in yogurt sales.
In morning trading, General Mills shares rose 13 cents to $37.68. The stock lost 1.5 percent Wednesday after the company reported results.
