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General Mills profit beats as cost cutting pays off

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General Mills profit beats as cost cutting pays off
Two types of Cheerios cereal, one with protein (L) and one without, are seen in this photo illustration in Wilmette, Illinois September 12, 2014.

General Mills Inc (GIS.N), the maker of Cheerios cereal and Yoplait yogurt, reported a better-than-expected quarterly profit, as its cost-cutting programs helped reduce the impact of weaker sales in the United States.

General Mills, which gets about 60 percent of its sales from the United States, said lower volume sales reduced sales growth by 8 percentage points in the quarter ended Feb. 28.

The company has been cutting jobs and selling plants and less-profitable brands to reduce expenses.

The Minneapolis-based company is also investing in gluten-free foods and cutting back on salt in its products to combat a shift in consumer preferences to less-processed foods.

Net income attributable to General Mills rose to $361.7 million, or 59 cents per share, in the third quarter, from $343.2 million, or 56 cents per share, a year earlier.

Excluding items, the company earned 65 cents per share.

The company's net sales fell 8 percent to $4 billion, falling for the third quarter in a row.

Analysts on average had expected earnings of 62 cents per share on revenue of $4.08 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Sriraj Kalluvila)

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23 March 2016, 16:25