Acquisition hurts projected earnings

General Mills recently announced that its fourth quarter earnings will be less than estimated due to the acquisition of Pillsbury. The company's third quarter earnings were also hurt, falling to 27 cents to 29 from an expected 40 cents to 44 cents a share.

"This primarily reflects a onetime

General Mills, now the world's fifth-largest food company, admits problems arose during the integration of sales forces, says Sanger.

"We had clear expectations that the single, most difficult aspect of this combination would be the initial sales handling," says Sanger.

"What we underestimated was the volume impact that we would have in the first couple of months."

Fourth quarter earnings are expected to reach 43 cents to 45 cents a share.

According to Salomon Smith Barney analyst Jaine Mehring, "An earning miss does not take us by surprise," although she does say that the magnitude of the decline was larger than expected.