General Mills Inc.'s (GIS) fiscal first-quarter earnings soared 51% as the company's profit margins widened in tandem with moderating commodity prices and as sales rose of household staples like Hamburger Helper, Multigrain Cheerios and Pillsbury cookie dough.

The results handily topped expectations and the processed-food giant again raised its fiscal-year earnings view, this time by 20 cents to $4.40 to $4.45 a share.

Lower commodity prices are aiding the large food makers who were hurt last year as their raw material costs surged. Despite the declines in raw material costs, these companies have largely avoided the large scale price rollbacks some investors had feared. That is helping their profit margins.

General Mills' first quarter input costs came in lower than it expected. ConAgra, maker of Hunt's sauces and Healthy Choice meals, this week also raised its fiscal year earnings forecast. Their upbeat outlook bodes well for the packaged foods sector and other food companies like Kraft Foods Inc. (KFT) and Kellogg Co. (K) that will report in coming weeks.

Companies like General Mills have been helped by aggressive efforts to cut costs internally. For instance, the company cut the gallons of fuel it used by 10% in the first quarter, partly by coordinating and managing its trucks more efficiently. In an interview Chief Executive Ken Powell said the company is also making greater use of rail transportation, which can be cheaper than trucking.

"We were able to recover margins in the first quarter despite the fact we haven't taken a price increase in the vast majority of our categories in over a year," said Powell. The company's internal program to cut costs and improve margins "is the gift that keeps on giving," he said.

General Mills says that for the most part it isn't promoting much more than it did last year and has avoided price cuts in its retail business. Despite the moderation in commodity pressures, the company still expects its input costs for the fiscal year to be higher than a year earlier. Cereal companies General Mills and Kellogg have strong brands, and private label penetration in the cereal category is much lower than far more commoditized categories like bread and cheese. That is helping the branded cereal makers hold on to price increases they have taken. In the latest quarter, General Mill's gross margin jumped to 41.5% from 34.1%.

For the quarter ended Aug. 30, General Mills reported a profit of $420.6 million, or $1.25 a share, up from $278.5 million, or 79 cents, a year earlier.

Excluding items, such as hedging gains and losses, earnings were up at $1.28 from 96 cents. Revenue edged up 0.6% to $3.52 billion, with currency fluctuations hurting sales results by 2 percentage points. Analysts polled by Thomson Reuters most recently were looking for earnings of $1.03 on revenue of $3.49 billion.

Powell and Chief Financial Officer Don Mulligan said in the same interview that they are open to making small acquisitions that complement their business, but don't see the need for a large "transformational" deal as the company's current business model has performed well.

Merger and acquisition activity has heated up in the consumer products space, with Kraft recently making a bid for Cadbury (CBY).

At its U.S. retail business, General Mills sales rose 5.8% and profit rose 21%. The bakery and food-service unit remains under pressure amid restaurant industry weakness, with sales down 16% on divestitures and falling flour prices. However, segment profit more than doubled. The stock was recently up 4.2% to 63.53.

-By Anjali Cordeiro, Dow Jones Newswires; (212) 416-2200; anjali.cordeiro@dowjones.com

(Tess Stynes contributed to this report)