NEW YORK (Reuters) - General Mills Inc <GIS.N>, the maker of Cheerios cereal and Yoplait yogurt, forecast better-than-expected earnings for the current fiscal year, helped by new products and moderating commodity costs.

It also posted a higher-than-expected quarterly profit, boosted by a 12-percent increase in its U.S. retail unit, which includes Pillsbury baking products and Green Giant frozen vegetables.

The net profit was $358.8 million, or $1.07 per share for the fourth quarter that ended May 31, compared with $185.2 million, or 53 cents a share, a year earlier.

Excluding a loss on product lines it sold off in the fourth quarter and the effect of commodity costs, its profit was 86 cents a share, above the average expectation for 80 cents a share, according to Reuters Estimates.

Net sales rose 5 percent to $3.6 billion, boosted by U.S. demand for items such as cereal and Pillsbury baking products.

For fiscal year ending in May 2010, General Mills forecast earnings of $4.20 per share to $4.25 per share, excluding the impact of commodity costs. Analysts expect $3.17 per share.

While General Mills is betting on innovation and marketing to help its results this year, it had said in June that it expects the rate of U.S. retail net sales growth to "moderate" in 2010 from 2009 levels, when it hiked prices to counter higher commodity costs.

The company forecast low commodity inflation in the current fiscal year, when it expect sales to be driven by volume, rather than due to higher prices for items.

General Mills shares rose 1.7 percent in premarket trading to $57.

(Reporting by Aarthi Sivaraman; additional reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Himani Sarkar and Derek Caney)