General Mills Profit Drops 25%

In: Business and Management

Submitted By bu123
Words 506
Pages 3
2. “General Mills Profit Drops 25%”, Published on September 17, 2014, WSJ
This article explained General Mills tried against tough industrywide environment, while company performed even worse than same term in last year in core business with announce fresh deal. With announce plan to acquire Annie’s, an organic-food marker, with 37% premium to the share price in the deal. Because organic and natural foods is more attraction than traditional brands such as General Mills. General Mills tried to cut costs and shrink capacity to finish deal and respond to week demand. But Investors and markets response is not good. The share price is declining 3.7% in afternoon trading. From the article, we can know, the operating environment quite challenging recently. The overall news for General Mills said total revenue and earnings are declining. The overall performance missed expectations that Wall Street analysts came out.
From the article, I think this deal is not good. Nearly a week ago, I have saw general mills to buy Annie’s Inc. on Wall Street Journal for 820 million dollar, was 37% premium to the share price before the deal. Right now, Wall Street Journal published “General Mills Drops 25%”, which means markets are down on this deal. Also, investors shrug off this deal. Obviously, stock price were decreasing in afternoon trading afternoon, which was down 3.7%. Market reaction is not good. Also, under the bad situation during the whole industry, General Mills cuts costs and shrink capacity to try acquire Annie’s with 37% premium to the current share price in the deal. The action seems not wise. With continues lower earnings, company still perform risky behavior. The result turns out performance of company business even worse.
I think General Mills’ deal is relative to our class, which are incremental cash and NPV. Because of company want to against industrywide…...

Similar Documents

General Mills a Company to Work for

...products of the General Mills Company. General Mills, headquartered in Minneapolis, Minnesota, is one of the world’s largest food companies. In fact on any given day it is estimated that General Mills provides 60 million servings of ready-to-eat cereal, 5 million cups of yogurt products, 5 million Pillsbury cookies, 2 million pounds of Green Giant vegetable and more than 1 million servings of Haagen-Dazs ice cream globally. General Mills is currently marketing in more than 100 countries on six continents; employing a little over 33,000 employees, half of which are working outside the United States. Global net sales for fiscal year 2011 were $14.9 billion dollars; $10.2 billion were from U.S. retail. And all of this started with two flour mills in the 1860s and Cadwallader C. Washburn’s vision to revolutionize the milling industry so produce flour with superior baking properties. Through this manufacturing, General Mills produced Gold Medal flour in 1880, which to this day remains the number one selling flour in the United States. The mission statement at General Mills is “Nourishing Lives – making lives healthier, easier and richer every day”. General Mills has its written values for the company on its website: Do the right thing all the time, Innovate in every aspect of our business, Build our great brands, Respect, develop and invest in our people, and Strive for consistently superior performance. How do they know they are succeeding in these values besides profits? In......

Words: 720 - Pages: 3

A Cost Analysis of General Mills

...GENERAL MILLS, INCORPORATED A Cost Accounting Analysis COMPANY BACKGROUND General Mills (GSI) is the sixth largest food company in the world. The company currently operates in more than 100 foreign countries and employs over 35,000 people. . GSI manufactures and markets branded consumer foods worldwide and supplies branded and unbranded food products to the foodservice and commercial baking industries. The company manufactures cereals, yogurt, ready-to-serve soup, dry dinners, frozen vegetables, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza, flour, fruit and snacks; and organic products, including soup, granola bars, and cereals; and ice cream and frozen desserts, and high fiber snacks. Its best knows product brands are Betty Crocker, Green Giant, Pillsbury, Old El Paso, Cheerios and Haagen-Dazs. It markets its products through its direct sales, broker and distribution a to grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, commercial and noncommercial foodservice distributors and operators, restaurants, and convenience stores. The company was founded in 1928 and is based in Minneapolis, Minnesota. GSI’s businesses are organized into three operating segments: U.S. Retail, International, and Bakeries and Foodservice. The U.S. Retail segment includes sales to grocery stores, mass merchandising, and membership stores such as BJ’s, Sam’s and Costco, natural food chains, drug...

Words: 1973 - Pages: 8

General Mills

...General Mills case study Concepts A) General Mills is a global food company. The main products of the company are baking products, frozen products, ready-to-eat cereals, snacks, etc. The company sells its products to supermarkets, groceries, and wholesalers. The company makes money by introducing new products in the market. B) The financial statements that are commonly prepared for external reporting purposes are balance sheet, statement of cash flow, statement of shareholder’s equity and income statement. The title General Mills give these statements are General Mills inc and Subsidiaries consolidated statement of earnings i.e. Income statement and consolidated balance sheets, consolidated statement of cash flows, and consolidated shareholder’s equity. Consolidated means combined financial statements of a parent company and its subsidiaries. Company’s financial statements give an aggregate view at the financial position of a company. Parent company and its subsidiaries help to determine position of an entire group as opposed to one company’s standalone position. C) In US, publicly traded companies must file financial statements with the SEC – Securities Exchange Commission. The 2 main compulsory filings are:- Form 10K – the audited annual report that includes the four financial statements with explanation and analysis of financial results. Form 10Q – the unaudited quarterly report that includes summary version of the 4 financial statements and disclosures.......

Words: 1047 - Pages: 5

General Mills

...General Mills’ Acquisition of Pillsbury from Diageo PLC Lauren Sherlock Jason Park JP Zendman 12/9/2009 General Mills’ Acquisition of Pillsbury from Diageo PLC Situation Analysis: In December 2000, management at General Mills (GM) proposed a plan to acquire Pillsbury, a bakedgoods producer, in a stock-for-stock exchange. Pillsbury is currently controlled by Diageo PLC, one of the world’s leading consumer–goods companies. The deal specifies that General Mills is to create and thus issue additional shares of common stock to Diageo in exchange for complete ownership of the Pillsbury subsidiary. If the deal is executed, Diageo will become General Mills’ largest shareholder. The consideration to Diageo would include 141 million shares of the company's common stock and the assumption of $5.142 billion of Pillsbury debt, making the deal worth over $10 billion. In addition, the agreement will contain a contingency, as up to $642 million of the total transaction value may be repaid to General Mills at the first anniversary of the closing, depending on its (20-day) average stock price at that time. Therefore, we must calculate and thus analyze the various costs and savings associated with the transaction to determine whether or not General Mills’ shareholders should vote for the proposed merger. If approved, this will be the biggest takeover in GM’s 136 years of business and General Mills will become the fifth largest food company in the world (Forster, 2002). General Mills......

Words: 7223 - Pages: 29

General Mills

...Employees Gobble up the benefits at General Mills #1. What employee benefits that are not described in this case would you expect to be important to employees at General Mills? Why do you think that they are not mentioned? Salaries, Employee Benefit Basics Retirement Options Training and Assistance Compensation Packages Health Insurance Family Benefits, Ancillary Insurance Time Off Wellness Initiatives Job training and retirement compensation should be most important benefits to GM employees but were not describe in this case Reasons I, think are as General mills vision to be the employer of choice globally, they refused to publicly discuss their salaries to avoid been copied or challenged by competitors. This area of the organization is kept confidentially with HR and its individual employees. “Our most valuable asset, we aspire to be a global employer of choice. We offer competitive salaries and benefits, provide a safe working environment, value diversity and encourage a healthy work/life balance. Our business success comes when employees feel empowered to take initiative, voice their opinions and build on their experiences within the company and in the community. We are proud of our strong sense of honesty and integrity. Wherever General Mills employees work, we strive to create an atmosphere of mutual trust and respect”. #2. What evidence can be found in this case to determine that benefits of General Mills are tied to benefits objectives and......

Words: 565 - Pages: 3

General Mills

...General Mills (NYSE: GIS) is not just a cereal maker, it is one of the largest packaged food producers in the world. Starting as a successful flour mill near the Mississippi River, it has grown to own some of the most recognizable brands, including Cheerios, Wheaties, Progresso Soup, Hamburger Helper, and Fruit Roll-Ups. Some of its #1 and #2 market-leading brands are Better Crocker, Gold Medal, Green Giant, Pillsbury, and Yoplait. General Mills operates in more than 130 countries worldwide and divides its business into three core segments: U.S. Retail (70% of revenue through major retailers), international (18% of revenue and supported by a joint venture with Swiss food giant Nestle SA), and bakeries and foodservices (12% of revenue). Currently, it’s growing its reach from grocery stores into new channels like super centers, drug and discount stores, and convenience stores. It is also expanding quickly into growing markets such as China, Russia, and Latin America. The goal of General Mills is to be among the most socially responsible food companies in the world in addressing the interrelationship of economic, environmental and social value. In 2012, they have reported continued progress in advancing their goals specifically in the health, environment, and sourcing areas. They have improved the health profile of their products again due to the increase of healthy and organic food choices, and have decreased natural resource consumption in global supply chain......

Words: 1631 - Pages: 7

General Mills

...General Mills, Inc Summary General Mills is an American company that specializes in the production, packaging and distribution of food products. The company has managed to acquire a significant share of the market through mergers and acquisition. Currently, the company controls about 31 percent of the market. The industry is characterized by a moderate to low level of competition. The main competitors include Groupe Danone, Kellogg, and Kraft. Each company is able to retain its customer base since consumers tend to consume foods they are used to and hence strong brand loyalty. The company’s competitive advantage lies on its broad range of products and high level of innovation. High level of innovation has enabled the company to meet the changing customers’ need effectively while minimizing the operational costs. By providing a wide range of products, General Mills has managed to minimize risks. General Mills basically targets three groups, which include; baby boomers, Hispanics and the Minneapolis population. General Mills, Inc General Mills, Inc is an American company that is headquartered in Minneapolis in Minnesota. The history of the four industry traces back to the 1850’s and General Mills was founded in 1928 by James Ford Bell, who facilitated a merger between several milling companies in the region. The company is principally involved with the production and distribution of consumer foods. The company provides a wide range of products including......

Words: 625 - Pages: 3

General Mills

...piston. The first piston or the displacer serves as control when the gas chamber is heated and when cooled. The function of the displacer is to move the air from one end of the cylinder to the other. As shown in Figure 2.2, the displacer is the large piston and is very loose to its cylinder, so air can move easily between the heated and cooled sections of the engine as the piston moves up and down. When the displacer is near the top of the large cylinder, most of the gas inside the engine is heated by the heat source and it expands. Pressure builds inside the engine, forcing the power piston up. When the displacer is near the bottom of the large cylinder, most of the gas inside the engine cools and will contract. This causes the pressure to drop, making it easier for the power piston to move down and compress the gas. Another piston is called power piston. It is the one connected to a flywheel via a crankshaft to provide the output power of the engine. This is the smaller piston at the top of the engine. It is a tightly-sealed piston that moves up as the gas inside the engine expands (Nice 2013). Operational Principle of Stirling Engine Like a steam engine or an internal combustion car engine, a stirling engine converts heat energy to mechanical energy by repeating a series of basic operations, known as its cycle (shown in Figure 2.2) during which the gas undergoes the following transformations: (1) heating and expansion, (2) transfer and cooling, (3) cooling and......

Words: 7474 - Pages: 30

General Mills

...General Mills Today alone General Mills will provide 60 million servings of ready-to-eat cereal, 27 million servings of Yoplait dairy products, 5 million Pillsbury Cookies, and 1 million servings of Häagen-Dazs ice cream. These impressive numbers prove what a large and varied food company General Mills is. Throughout the semester we researched and analyzed General Mills from four different angles. These include a business model analysis, accounting and accounting risk analysis, a financial analysis, and a valuation analysis. We have decided General Mills is a successful company that will continue its success into the future. General Mills manufactures and markets branded consumer foods across the globe. It also supplies unbranded food and products to many food service industries. The company was founded in Minneapolis 1928 and it is still based there today. It has acquired many companies since its origination leaving it today as one of the world’s largest food suppliers. General Mills operates in three segments, one being retailers, the second is bakeries/food industries, and The business model for General Mills is to obtain a larger consumer base. The more consumers that enjoy or use General Mills products the more their revenue will go up. General Mills is large in marketing and tries to attract all age ranges with specific foods. It also wants to reach all food segments to be able to reach all types of customers...

Words: 4239 - Pages: 17

General Mills Questions

...General Mills’ Acquisition of Pillsbury from Diageo PLC Lauren Sherlock Jason Park JP Zendman 12/9/2009 General Mills’ Acquisition of Pillsbury from Diageo PLC Situation Analysis: In December 2000, management at General Mills (GM) proposed a plan to acquire Pillsbury, a bakedgoods producer, in a stock-for-stock exchange. Pillsbury is currently controlled by Diageo PLC, one of the world’s leading consumer–goods companies. The deal specifies that General Mills is to create and thus issue additional shares of common stock to Diageo in exchange for complete ownership of the Pillsbury subsidiary. If the deal is executed, Diageo will become General Mills’ largest shareholder. The consideration to Diageo would include 141 million shares of the company's common stock and the assumption of $5.142 billion of Pillsbury debt, making the deal worth over $10 billion. In addition, the agreement will contain a contingency, as up to $642 million of the total transaction value may be repaid to General Mills at the first anniversary of the closing, depending on its (20-day) average stock price at that time. Therefore, we must calculate and thus analyze the various costs and savings associated with the transaction to determine whether or not General Mills’ shareholders should vote for the proposed merger. If approved, this will be the biggest takeover in GM’s 136 years of business and General Mills will become the fifth largest food company in the world (Forster, 2002). General Mills......

Words: 7223 - Pages: 29

General Mills Company I

...Introduction General Mills Company is one of the 500 fortune company in the American, with a primarily food products. The head quartered in Golden Valley, Minnesota of the suburb of Minneapolis. General Mills markets are very know by the brand of Betty Crocker, Yoplait, Colombo, Green Giant, Cheerios, and Lucky Charms. General Mills has had a good history and sold a lot of products along the way. They are the 100 leading U.S brands and numerous categories in the world. Findings General Mills History In the year of 1860’s, General Mills was starting with two flour mills. They had transformed the mills industry of just producing the flour with superior baking in their properties. Around the year 1960’s General Mills were marketing the children’s product. The product they were marketing was Play-Doh, Easy Bake Ovens, Spirograph, Monopoly and Nerf balls. They had associate with characters that was memorable with them was Betty Crocker, Rocky and Bullwinkle, the lone Ranger and the Pillsbury Doughboy after what had happened to the Wheaties. Wheaties was the breakfast of Champions that was sponsoring baseball radio broadcast that the movie script in 1933. General Mills have a postwar consumer that is interesting in convenience complemented of the adverting efforts. After World II, the company continued to refine the promotion as the Betty Crocker cookbook that was first published in the 1950. The food sales in the second position had research and media capitalize the......

Words: 1482 - Pages: 6

General Mills Earnings

...General Mills 2014 ANNUAL REPORT PUTTING THE CONSUMER Our Fiscal 2014 Financial Highlights In millions, except per share and return on capital data 52 weeks ended 52 weeks ended May 25, 2014 May 26, 2013 Change Net Sales Adjusted Segment Operating Profit* Net Earnings Attributable to General Mills Diluted Earnings per Share (EPS) Adjusted Diluted EPS, Excluding Certain Items Affecting Comparability* Return on Average Total Capital* Average Diluted Shares Outstanding Dividends per Share $17,910 $ 3,154 $ 1,824 $ 2.83 $ 2.82 11.6% 646 $ 1.55 $17,774 $ 3,223 $ 1,855 $ 2.79 $ 2.72 12.0% 666 $ 1.32 + 1% − 2% − 2% + 1% + 4% −40 basis pts. − 3% +17% N ET SA LE S Dollars in millions 2010 201 1 2012 2013 2014 14,636 14,880 16,658 17,774 17,910 A DJ USTE D S E G M E NT O PE R ATI N G PRO F IT * Dollars in millions 2010 201 1 2012 2013 2014 2,854 2,946 3,012 3,223 3,154 A DJ USTE D D I LUTE D E A R N I N G S PE R S H A R E * Dollars 2010 201 1 2012 2013 2014 2.31 2.48 2.56 2.72 2.82 D I V I D E N DS PE R S H A R E Dollars 2010 201 1 2012 2013 2014 0.96 1.12 1.22 1.32 1.55 *See page 87 for discussion of non-GAAP measures. Putting the Consumer First At General Mills, our key strategy for growing our worldwide food businesses is to Put the Consumer First. We work to connect with consumers and develop deep insight into what they like to eat, where they shop for food, and how they approach cooking today. From product development to......

Words: 48114 - Pages: 193

General Mills

...do you think their efforts have impacted company profits? General Mills has shared its Global Responsibility Report to the public for the past 45 years. The report outlines the company’s approach to creating economic, environmental and social value in the countries it operates. Their goal is nourish lives and make an impact on our communities through various outlets. In 2005, General Mills implemented its US Health Matric. Since then, they have nutritionally improved more than 850 products. Their goal is to help people live healthier lives by creating nutritious foods, championing global food safety, education consumers about nutrition and fitness. Part of making this possible is sourcing. General Mills sources the raw materials used in their products. They hope that by 2020 they will source 100% of their top 10 priority ingredients. The environment is also of importance to General Mills. They strive to continually reduce their environmental footprint by improving the environmental performance of their operations. They have cut energy use by 10% and GHG emissions by 23% from 2005 to 2014. Also, since 2005, they have reduced their waste generation rate by 41%. 87% of all waste from their North American operations are recycled or reused. General Mills has decreased its fuel usage rates down 22%, another example of what it is doing to help the environment. A top priority in any company should be the workplace. General Mills’ goal is to foster a safe, ethical and diverse......

Words: 441 - Pages: 2

General Mills

...BA 3103: 11/15/2015 Critical Analysis # 3- General Mills Over time, changes occur and one of those changes are consumer demands in the food industry. More people are becoming health conscious and are interested in what they're consuming down to the ingredients used. A health trend that is occurring and taking over in all aspects in health and our not only food related. Companies are becoming aware and are taking note of these changes to this “self-care” health market. In order to appeal to the consumers these companies are going to have to shift the products their manufacturing and choose healthier products or correct how their current products are be being processed. Consumers are less interested in processed products and are appealing to fresh and organic products. One company trying to improve and advance on these changes is General Mills, Inc. General is a well-known multiple manufacturer of numerous products ranging from cereals to yogurt and many more. “It’s brand portfolio includes more than 89 other leading U.S. brands and numerous category leaders around the world” (Wikipedia). General Mills is reaching many consumers and has hit the top 500 list on Forbes list of largest corporations. Last month, General Mills had a recall on Cheerios and Honey Nut Cheerios on its cereals because of the presence of wheat in supposedly gluten-free products. “Jim Murphy, senior vice president of the company's cereal division, said he was "embarrassed and truly sorry" by......

Words: 929 - Pages: 4

General Mills

...In 1989, the General Mills management team became aware of expansion opportunities in today’s environment of globalization. The stagnation in the cereal market in the United States required the company to expand into new global markets. The philosophy of diversification had for the most part been a success resulting in the expansion into five unrelated industrial areas. Historically the companies’ efforts to branch into some areas outside the food area are of concern. These unrelated areas of growth have been unsuccessful. The resulting financial losses were an impetus of anxiety and concern to the shareholders and brought forth Wall Street skepticism. It is my opinion that the strategic planning process is flawed. Corporate strategy is and must be the overall managerial game plan for a diversified company; it extends companywide, an umbrella over all a diversified company’s group of business. The crafting of corporate strategy for a diversified company involves four kinds of initiatives and it is evident that these initiatives are successful in related industries since these market related acquisitions have resulted in a net profit increase. Management must be aware that the overall responsibility of corporate strategy is the responsibility of all corporate managers. Senior corporate executives normally have lead responsibility for devising corporate strategy and for choosing among whatever recommended actions bubble up from lower level managers. Key unit heads may also......

Words: 280 - Pages: 2

Alias - Die Agentin (2) | Groove Adventure Rave | It is Well (Live)