Minneapolis / MN. (djn) Fitch Ratings boosted its outlook on General Mills Inc. to positive, citing the packaged-food giant´s continuing «solid operating performance» and debt-reduction efforts.
General Mills´ credit profile, as a result, has improved more than expected as its debt levels fell 671 million USD during the fiscal year ended May 30, Fitch said. Long-term debt finished the year at 5,27 billion USD.
Fitch said this week the outlook change also reflected earnings-growth prospects at the maker of Cheerios and Pillsbury as well as «substantial internally generated liquidity», which provides the company with «ample financial flexibility».
Sales growth excluding divestitures and an extra week in the prior-year period rose four percent in the latest fiscal year, a rate Fitch said is sustainable. First-quarter results are due next month.
General Mills is rated at BBB+, three steps into investment-grade territory. That level takes into account «the company´s leading market positions and strong brand equity in its major product categories such as cereal, yogurt, soup and snacks».
Fitch, however, noted it could reverse the ratings outlook back to stable if debt-financed share-repurchases and acquisitions lead to debt levels to increase. Shares were down 0,6 percent at 35,30 USD in light pre-market trading. The stock has risen 17 percent this year through this week.
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