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Omar Venerio
Omar Venerio
Articles (1736) 

Wednesday Morning Market Highlights

Markets green, shares of General Mills jumps on earnings report

US Markets

U.S. stocks were in the green on Wednesday morning after the S&P 500 rose yesterday for the first time in five sessions. Today, Nike (NYSE:NKE) is pushing the Dow higher after beating Wall Street in earnings and revenue. The Dow advanced 0.55% to 27,437, the S&P 500 index advanced 0.14% to 3,318 and the Nasdaq Composite Index was down 0.22% to 10,939.

Gainers

• Twitter, Inc. (NYSE:TWTR) +4.5%

• CarMax Inc (NYSE:KMX) +2.4%

• Twitter, Inc. (NYSE:TWTR) +2.6%

• Norwegian Cruise Line Holdings Ltd. (NCLH) +1.4%

Losers

• Albemarle Corporation (NYSE:ALB) -8.1%

• Tesla, Inc. (NASDAQ:TSLA) -4.3%

• Edwards Lifesciences Corporation (NYSE:EW) -2.5%

• Intuit Inc. (NASDAQ:INTU) -1.5%

Global Markets

The main European stock markets traded in the green. The U.K.'s FTSE 100 gained 1.98%, France's CAC 40 jumped 1.46%, Germany's Dax was up 1.28% and Spain's Ibex 35 advanced 1.50%.

In Asia, Japan's Nikkei 225 fell 0.06%, India's BSE Sensex retreated 0.17%, Hong Kong's Hang Seng jumped 0.11% and China's Shanghai Composite was up 0.17%.

General Mills releases earnings report

Shares of General Mills, Inc. (NYSE:GIS) gained 0.5% on Wednesday morning after the company announced its first-quarter fiscal 2020 results. The company posted earnings per share of $1.00, beating analysts' estimates by 13 cents. Revenue of $4.36 billion grew 9.0% year-over-year and also beat expectations by $150 million.

Chairman and CEO Jeff Harmening had the following to say:

"We continued to drive exceptional results this quarter, highlighted by broad-based market share gains amid elevated at-home food demand due to the COVID-19 pandemic…The fundamentals of our business are strong. We're investing in our brands, executing with speed and agility, and maintaining our focus on the health and safety of our employees and our consumers. And, importantly, we're resuming dividend growth sooner than initially planned. I'm more confident than ever that General Mills is poised to emerge from the pandemic a stronger company and in a position to generate consistent, profitable growth and top-tier returns for our shareholders."

In the quarter, the gross margin rose 170 basis points to 36.4% of net sales and adjusted gross margin increased 100 basis points to 36.2% of net sales, driven by the benefit of fixed cost leverage in the supply chain.

The operating profit reached $854 million, up 29%, due to higher net sales, higher gross margin and lower mark-to-market and restructuring charges. Further, the operating profit margin of 19.6% rose 310 basis points. The adjusted operating profit margin also increased by 210 basis points to 19.1%.

Looking at cash generation, the cash provided by operating activities reached $584 million, up 2% from the prior year, fueled by higher net earnings. Capital investments were $117 million, higher than $70 million the past year.

The company's board of directors declared a quarterly dividend of 51 cents per share, representing a 4% increase from 49 cents per share.

During the recent quarter, Ken Fisher (Trades, Portfolio) added 3% to his holding in the company for a total of 65,265 shares. Joel Greenblatt (Trades, Portfolio) cut his investment by 11% to 113,176 shares. Mario Gabelli (Trades, Portfolio) reduced his holdings by 18% to 684,129 shares.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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