In Wednesday trading, shares of General Mills Inc. (GIS, Financial) fell after the company reported its financial results for the third quarter. The company posted adjusted earnings per share of 79 cents. Revenue of $3.88 million grew 2.4% from the prior-year quarter.
"While I'm pleased that we're delivering on the first part of that goal, with strong consumer marketing, innovation, and in-store execution leading to a second consecutive quarter of organic net sales growth, I'm disappointed in our results on the bottom line," Chairman and CEO Jeff Harmening said. "Our third-quarter operating profit fell well short of our expectations, and cost pressures are impacting our full-year outlook. Like the broader industry, we're seeing sharp increases in input costs, including inflation in freight and commodities. Because of our improved volume performance, we're also incurring higher operational costs."
Further, the gross margin fell 220 basis points to 32.3% of net sales. The adjusted gross margin declined 250 basis points to 32.5% due to higher costs, including freight and logistics costs, commodity inflation and merchandising expenses.
Operating profit reached $593 million, up 9% from last year due to lower restructuring, impairment and other exit costs. The operating profit margin increased 100 basis points to 15.3%. Total segment operating profit of $628 million was down 6% in constant currency.
Moreover, the company's acquisition of Blue Buffalo (BUFF) is expected to close in the fourth quarter.
Salesforce.com inc. (CRM, Financial) jumped almost 30% on Tuesday, but reversed lower on Wednesday. The company said it will buy MuleSoft (MULE, Financial) in a $6.5 billion deal. The company will pay $36 in cash and 0.0711 shares per MuleSoft share. The deal is expected to close in the second quarter.
Disclosure: The author holds no positions in any stocks mentioned.
