Blames Pillsbury Integration for Lowered Estimates

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NEW YORK ( -- General Mills, the Minneapolis-based food company, saw its stock price drop since announcing late Tueday that it would not meet earnings expectations for its fiscal third quarter ending Feb. 28.

Shares trading on the New York Stock Exchange today fell $4.85, or 10%, to $43.86.

The miss, the first after 16 consecutive quarters of growth, is said to be a result of the integration of the Pillsbury portfolio into the General Mills sales force, which caused a disruption in merchandising programs for both Pillsbury and existing General Mills brands.

As a result, volumes declined 9% in December, with just marginal improvement in January and so far this month.

CEO Steve Sanger said earnings for the third quarter were expected to range from 27 cents to 29 cents vs. 40 to 44 cents.

General Mills acquired the Pillsbury unit from Diageo last year. The acquisition gives the company a $13.5 billion portfolio of brands across refrigerated, frozen and dry grocery categories, among them Betty Crocker, Yoplait, Pillsbury, Green Giant, Progresso and Big G cereals.

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