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Alberto Abaterusso
Alberto Abaterusso
Articles (1380) 

General Mills to Report 2nd-Quarter Results Wednesday

Analysts expect the company to post EPS of 83 cents on $4.08 billion in revenue

December 18, 2017 | About:

General Mills Inc. (NYSE:GIS) will report its financial results for the second quarter of fiscal 2018 before the opening bell on Dec. 20. 

Analysts estimate earnings will come in around 83 cents per share. This represents a 2.4% decrease year over year. Eighteen analysts were surveyed and their estimates range between a low of 80 cents and a high of 86 cents.

The average analyst forecasts a 0.7% decline in sales to $4.08 billion.

Fifteen analysts' estimates ranged between a low of $3.99 billion and a high of $4.15 billion.

From fiscal 2018 to fiscal 2019, analysts expect General Mills' sales to grow 4.5%. Over the next five years, sales are expected to grow 6.40% per annum.

The chart below illustrates the decline in General Mills’ sales over the past five quarters.

The chart below illustrates the decline in General Mills’ sales over the past five fiscal years. 

As of the most recent quarter, General Mills has approximately $820.8 million in cash on hand and securities, or $1.44 per share. The total debt amounts to $10.09 billion, which equates to a total debt to equity ratio of 2.58 versus an industry median of 0.51. This means  General Mills’ balance sheet is more leveraged than its peers. With an interest coverage ratio of 3.81, however, the company has no problem paying interest on its outstanding debt.

As of May 28, General Mills’ total assets and total liabilities are valued at $21.813 billion and $16.574 billion. Total current assets are valued at $4.061 billion and current liabilities are valued at $5.331 billion, for a total current ratio of 0.76 versus an industry median of 1.58. The latter ratio indicates the company is less capable than its peers in generating the financial resources to meet its short-term obligations.

GuruFocus assigns General Mills a financial strength rating of 5 out of 10.

Over the past 12 months, General Mills generated approximately $2.53 billion from its operations, of which about 65% is levered free cash flow.

Besides its growing business needs, the company also used its free cash flow to distribute dividends to its shareholders. The quarterly dividend of 49 cents per share leads to a forward annual dividend of $1.98 and forward yield of 3.45%.

General Mills is currently trading around $58.03 per share with a market capitalization of $32.98 billion, a price-book (P/B) ratio of 8.46, a price-sales (P/S) ratio of 2.20 and a price-earnings (P/E) ratio of 20.80. The stock's 52-week range is $49.65 to $63.74.

The forward P/E ratio is 18.35 versus an industry median of 18.55.

Disclosure: No positions in General Mills.

About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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