Bullish stock to watch: General Mills, Inc. (NYSE: GIS)

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General Mills, Inc. (NYSE: GIS) stock rose 1.94% on December 18th, 2019 and continued its bullish momentum in the pre-market session of 19th December, 2019 (as of 8:05 am GMT-5 ; Source: Google finance) after the company posted decent results for the second quarter of FY 20. Net earnings attributable to the company rose to $580.8 million in the second quarter ended Nov. 24, from $343.4 million, a year earlier. The second quarter adjusted gross margin and adjusted operating profit margin expanded by 80 basis points and 110 basis points, respectively, due to COGS HMM savings and favorable manufacturing leverage partially offset by input cost inflation and increased media expense.

GIS in the second quarter of FY 20 has reported the adjusted earnings per share of 95 cents, beating the analysts’ estimates for the adjusted earnings per share of 88 cents. The company had reported flat adjusted revenue growth to $4.42 billion in the second quarter of FY 20, missing the analysts’ estimates for revenue of $4.43 billion, according to IBES data from Refinitiv. This was missed due to lower demand for its snacks and yogurts in the United States. Organic net sales grew 1% due to strong growth in Pet. The second-quarter net sales for the Pet segment increased 16% to $389 million, due to positive contributions from volume growth and positive net price realization and mix

Additionally, the capital investments in the first half were of aggregate $158 million, which generated the free cash flow of $1.3 billion, up 14% from last year. The company has paid $596 million in dividends and reduced debt by $655 million in the first half of fiscal 2020. There has been 4% increase in the cash provided by operating activities to $1.46 billion through six months of fiscal 2020.

For the second half, the company expects to maintain the in-market competitiveness in North America Retail and will continue to boost strong retail sales growth for the Pet segment. The company expects the total Company organic net sales growth to accelerate in the back half on the back of improved results in the Convenience Stores & Foodservice, Europe and Australia, and Asia and LatAm segments along with the extra month of results in Pet.

For fiscal 2020, the company expects organic net sales to grow 1 to 2 percent, constant-currency adjusted operating profit is projected to increase 2 to 4 percent from the base of $2.86 billion reported in FY19. Constant-currency adjusted diluted EPS are expected to increase 3 to 5 percent. Free cash flow conversion of is projected to be at least 105 percent of adjusted after-tax earnings.

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