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General Mills raises FY'19 EPS outlook after beating Q3 estimates

General Mills Inc. has raised its adjusted diluted EPS outlook for fiscal 2019 after reporting better-than-expected third-quarter earnings that surpassed analysts' expectations.

The Minnesota-based food giant said March 20 that it expects its full-year 2019 constant-currency adjusted diluted EPS growth to be flat to 1% higher from its base of $3.11 in fiscal 2018. Its previous outlook was for growth to be flat to 3% lower.

General Mills said it anticipates that organic net sales growth for 2019 will be on the lower end of its initial guidance range calling for flat to 1% higher. It said that net sales, including the impact of the Blue Buffalo acquisition, are expected to finish toward the lower end of forecast range calling for 9% to 10% growth. General Mills bought the pet food company in April 2018 for $8.33 billion.

The company said it is pursuing its "Consumer First" strategy and plans to reshape its portfolio through growth-enhancing acquisitions and divestitures. It also said its accelerating growth on certain product categories, such as Häagen-Dazs ice cream, snack bars, Old El Paso Mexican food, and natural and organic food brands.

General Mills said it expects that its full-year 2019 adjusted operating profit will come in toward the higher end of its prior outlook calling for of 6% to 9% growth on its base of $2.6 billion in fiscal 2018.

For the third quarter ended Feb. 24, the maker of Cocoa Puffs and Cheerios cereal posted adjusted diluted EPS of 83 cents, up by 6% from the year-ago period on a constant-currency basis and above the S&P Global Market Intelligence consensus normalized EPS estimate of 69 cents.

General Mills said its third-quarter net sales rose 8% in reported terms and 10% in constant-currency terms to $4.2 billion, thanks primarily to the integration of Blue Buffalo. The company said third-quarter earnings attributable to the company fell to $447 million, compared to $941 million a year ago as the year-earlier quarter contained gains related to tax reform in the United States.