General Mills Inc
Excluding one-time items like changes in the market value of some commodity hedges, a gain from insurance settlement and tax expense, profit was 79 cents a share, lower than the analysts' average forecast of 87 cents, according to Reuters Estimates.
Sales for the maker of Progresso soup, Cheerios cereal and Yoplait yogurt rose 4 percent to $3.54 billion, as consumers ate more at home to save money in the recession.
For instance, sales rose 5 percent in the U.S. retail segment's meals unit, which sells Green Giant frozen vegetables, Helper dinner mixes and Progresso ready-to-serve soup.
In the Pillsbury division, sales were up 15 percent, helped by demand for Pillsbury Savorings frozen appetizers and refrigerated dough items.
The company has said it expects energy, ingredient and supply chain costs to be up 9 percent in fiscal 2009.
Although commodity costs have fallen from highs seen last year, companies argue that they are still up year over year. Some companies also entered contracts to buy commodities at those higher prices, and some of those contracts do not end until later this year.
But General Mills' fourth-quarter input costs will be well below the company's estimated rate for the full year, Chief Executive Ken Powell said in a statement. Lower input costs and an extra week of sales in the year will help the fourth quarter, he said.
General Mills now expects to earn $3.87 to $3.89 a share, excluding some items, for the fiscal year ending in May. It had previously forecast $3.83 to $3.87 on that basis.
(Reporting by Aarthi Sivaraman in New York and Brad Dorfman in Chicago; Editing by Derek Caney and Lisa Von Ahn)