General Mills (GIS), a Minneapolis-based consumer food products manufacturing company, is set to announce its fiscal 2Q17 results before the market opens on December 20, 2016.
Since the announcement of its fiscal 1Q17 earnings on September 21, 2016, the company’s share price has fallen 3.6%. In 1Q17, General Mills posted adjusted EPS (earnings per share) of $0.78 on revenue of $3.9 billion. Analysts were expecting the company to post EPS of $0.76 on revenue of $3.9 billion.
Although the fiscal 1Q17 earnings were in line with analysts’ estimates, the share price fell due to the warning by the CDC (UC Center for Disease Control and Prevention). On September 29, 2016, the CDC announced that although its investigation on E.coli outbreak from the flour produced at General Mills is over, the illness is expected to continue for some time because the company’s products have long shelf lives.
Since the beginning of 2016, the company’s share price has returned 9.5%. During the same period, Kellogg (K), B&G Foods (BGS), and Pinnacle Foods (PF) have returned 2.1%, 27.5%, and 19.6%, respectively. The broader comparative index, the Guggenheim S&P 500 Equal Weight Consumer Staples ETF (RHS), has returned 4.4%. RHS has 34.9% of its total holdings in food and beverage companies.
In this series, we’ll explore what investors can expect from General Mill’s fiscal 2Q17 earnings release. We’ll discuss analysts’ estimates for revenue, margins, and EPS. We’ll also look at the company’s valuation multiples and its expected stock price over the next 12 months.
Let’s start by discussing General Mills’ fiscal 2Q17 revenue.