Mixed bag for General Mills as profits drop 16 percent, but US sales rise

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Profits at General Mills have fallen 16 percent in the third-quarter, as the Minneapolis-based firm continues with its transformation that has already led to hundreds of job losses.

On Wednesday, the food giant released its third-quarter results revealing the profits drop, which according to the Wall Street Journal was primarily because of the effect of a strong dollar on its international sales, as well as the ongoing transformation costs.

It reported profits of $343 million, down from $410.6 million, but this was ahead of Wall Street estimates.

It follows a challenging period for firm, which is undergoing a transformation to react to changing consumer tastes that is seeing a shift towards healthier products.

But, there was better news for its domestic sales. The Wall Street Journal notes that U.S. sales rose by 1.3 percent to $2.65 billion in the third quarter, led by the sales of yoghurts and snacks.

The volume of sales was lower, the newspaper noted, but higher prices and growth from its acquisition of organic food company Annie's help offset this.

Over the past 30 months, the firm has already had two rounds of job cuts (under the names of Project Refuel and Project Catalyst), which the Star Tribune reports has seen 1,500 positions eliminated – around half of which were in Minnesota.

The last of the 800 job cuts from Project Catalyst – which included Minnesota workers – have now been completed, the company has said.

In September, the company announced 1,180 job cuts through another transformation initiative, Project Century, which are focused on operations in other states and are in the process of being made.

This includes consolidation and closures to facilities, affecting 100 jobs in Canada, 400 in Indiana, 250 in Massachusetts and 430 in California.

It had also previously announced 240 jobs would be cut in its international division following the combination of its Yoplait and General Mills operations.

The Associated Press reports shares of the Minneapolis company fell 36 cents to $51.69 in Wednesday morning trading. Its shares are up about 2 percent over the past year.

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