General Mills Inc. on Thursday said quarterly profit edged higher, though increased marketing spending and higher commodity costs tempered the increase.
The maker of Cheerios cereal, Progresso soups and Yoplait yogurt said profit was $224 million, or 62 cents a share, for the fiscal fourth quarter ended May 27. That compares with $222 million, or 61 cents a share, a year earlier.
Analysts, on average, forecast 63 cents a share, according to Reuters Estimates.
Sales rose 7 percent to $3.06 billion. Analysts, on average, forecast $2.99 billion, according to Reuters estimates.
General Mills, like many other food companies, has been spending more on marketing to help boost sales, while at the same time being pressured by rising costs for commodities like corn.
The company said it expected its commodity costs to rise 5 percent in fiscal year 2008. On Wednesday, ConAgra Foods Inc. (CAG.N: Quote, Profile, Research) forecast 6 percent commodity cost inflation for its business.
The company also raised cereal prices food prices this week to help offset higher costs.
For fiscal year 2008, the company forecast earnings of $3.39 to $3.43 a share and said it expected to meet its targets of low single-digit growth in net sales, mid single-digit growth in segment operating profits, and high single-digit growth in earnings per share.
Analysts, on average, forecast $3.44 a share, according to Reuters Estimates.
General Mills shares closed at $59.45 on Wednesday on the New York Stock Exchange. The stock trades at about 17.2 times next year's estimated earnings, compared with a multiple of 17.1 for cereal industry leader Kellogg Co. (K.N: Quote, Profile, Research).