NEW YORK, NY / ACCESSWIRE / May 21, 2018 / General Mills shares closed in the red this past Friday despite any remarkable news. The stock may have seen red in sympathy with Campbell Soup Company falling over 12% and hitting a low it hasn't seen in over five years. Campbell Soup reported third quarter results that didn't impress traders as well as a gave a grim outlook. The company's CEO also suddenly stepped down.
RDI Initiates Coverage on:
Campbell Soup Company
General Mills, Inc.
Campbell Soup Company shares collapsed on Friday and closed down 12.37%. Shares hit a more than five-year low of $34.09 after it was announced that the company's CEO Denise Morrison has suddenly resigned, effective immediately. Board member Keith McLoughlin, 61, has taken her place as interim CEO. Next to this surprising news, the company also reported lackluster third quarter results, revealing a loss of $393 million, or $1.31 a share. The company had posted a profit in a year ago period. The loss was because of a charge of $619 million related to Campbell Fresh. Net sales however saw a gain of 15% at $2.13 billion and earnings per share of 70 cents, which excluded one-time items, was 10 cents higher than what analysts had expected. CFO Anthony DiSilvestro said the company would conduct a critical review and remarked, "Everything is on the table. There are no sacred cows." He added, "We are all disappointed with the results of C-Fresh, and we acknowledge that they are unacceptable." According to DiSilvestro it was tariffs that contributed to the company's rising costs. He said, "The issue is primarily one of cost inflation and we're seeing and expecting an acceleration on the rate of inflation across a number of ingredient and packaging items. For example, we expect double-digit increases on steel and aluminum. A lot of that is driven or all of it's driven by the impact of anticipated tariffs.” The company also said that looking ahead, earnings per share is expected to fall 5 to 6%, higher than its earlier expectation of a fall of 2 to 4%.
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General Mills, Inc. shares closed down a little over 2% this past Friday on around 7.5 million shares traded. The stock came five cents shy of hitting its 52-week low despite no catalyst to explain the drop. Trading volume had a slight spike compared to the stock's average trading volume of about 6.4 million shares. Earlier this month General Mills announced that it has elected Maria Sastre to its board of directors which will take effect on June 1st. Sastre was recently the President and COO of Signature Flight Support, which is the largest business of UK-based BBA Aviation. General Mills Chairman and CEO Jeff Harmening remarked, "We are pleased to welcome Maria to the board as we continue to execute our strategic plan and drive significant long-term value for General Mills shareholders. With her experiences leading large, complex organizations and background in consumer-facing businesses, we are excited about the contributions she will make to the board and our company."
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