General Mills's Q2 income dips 4.5% on lower snack sales, international revenue

General Mills (GIS), the food manufacturer giant that owns Wheaties, Cheerios and Häagen-Dazs brands, said Thursday its fiscal second quarter net income dipped 4.5% as sales in snacks and baking products fell and international operations' revenue declined 12%.

Diluted earnings per share totaled 87 cents, up from 56 cents a year ago and beating analysts' consensus estimate of 82 cents.

Sales for the quarter fell 6% to $4.42 billion, partly due the divestiture of its North American Green Giant business.

In November, General Mills, based in Minneapolis, completed the sale of its Green Giant and Le Sueur vegetable businesses to B&G Foods for $765 million in cash and "an inventory adjustment" of about $58 million. General Mills will continue to operate the Green Giant business in Europe and other markets under license from B&G Foods.

"Our second-quarter results put us in line with our expectations at the midway point in our fiscal year," General Mills CEO Ken Powell said in a statement. "Our adjusted gross margin increased for the third consecutive quarter."

Sales for General Mills' U.S. retail unit, its largest business, fell 4% to $2.76 billion. The company partly attributed the decline to "acquisitions and divestitures" and lower sales of snacks and baking products.

Sales for each of its other operating units "declined mid single-digits," it said.

Its international businesses reported a 12% decline in sales to $1.16 billion. It blamed foreign currency exchange for the drop. "On a constant-currency basis, net sales increased 3%," it said. Sales were particularly robust in Latin America, it said.

Sales of the convenience stores and food service unit fell 4% to $506 million.