General Mills recently acquired Yoplait, adding its product line to the company’s popular Cheerios cereal, Nature Valley granola, and Hamburger Helper product lines.  General Mills continues to be one of the most popular product brands on grocery store shelves, but has been struggling with increased costs for ingredients and employees to manufacture, package, and ship the products.  The company estimates that cost increases has cost the company between 10% and 11% more this year and has planned to raise its prices on many of their products to offset the increased margin pressure.

The net income for the company for the second quarter was $444.8 million, or $0.67 per share.  This is down from $613.9 million, or $0.92 per share, for a year earlier.  If charges tied to the deal for Yoplait are excluded, earnings results were $0.76 per share.  Total revenue saw an increase of 14% to $4.62 billion.  General Mills expects adjusted earnings of $2.59 to $2.61 a share for the full year.

Don Mulligan, the company’s chief financial officer, said, “We knew it was going to be a tough environment and it is, but the year is shaping up as we anticipated.”  Revenue at the company’s bakery and food service units increased by 12%, reflecting strong sales of popular products like Pillsbury’s Mini-Pancakes and French Toast.  The company’s retail business in the US saw a 3% increase over last year with increased sales of cereal and snacks.  Yogurt sales and sales of higher priced baking products were weaker.