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Published: Saturday, 11/10/2001

General Mills' fiscal 2nd-quarter earnings drop


MINNEAPOLIS - General Mills, Inc., the maker of Cheerios and Wheaties cereals, expects fiscal second-quarter earnings to fall short of forecasts because of slower sales and the acquisition of Diageo Plc's Pillsbury operations.

The company expects to cut about 1,000 jobs as a result of the purchase, spokesman Tom Forsythe said. That's in addition to the 460 workers it will lay off next year at its Toledo cereal factory it will close and sell to International Multifoods Corp. and to the nearly 1,000 positions lost as a result of a hiring freeze while it completed the acquisition, he said.

Food retailers have been reducing inventories, and General Mills expects sales volume to rise at a low, single-digit percentage rate in the last three quarters of the year. The company will have about 342 million shares outstanding this year because of the Pillsbury purchase, about 17 percent more than last year.

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