BATTLE CREEK (dpa-AFX) - Cereal maker Kellogg Co. (K) reported Thursday a profit for the second quarter that increased from last year, despite higher commodity costs, reflecting sales growth.
Earnings per share topped analysts' expectations by two cents, while quarterly net sales missed their estimates. Morning Foods sales, including cereals, declined 3.3 percent in the U.S.
The company reaffirmed its earnings guidance for the full-year 2013, but trimmed its annual revenue growth outlook.
'While sales growth has been slower than we anticipated in developed markets, particularly the U.S., the work we have been doing on our cost base has enabled us to offset the impact. In addition, we have now owned Pringles for more than a year. The integration has gone very well, and we remain excited regarding the opportunities we see for future growth,' President and CEO John Bryant said in a statement.
The Battle Creek, Michigan-based maker of Rice Krispies, Pop-Tarts, Eggo waffles and Morningstar Farms brands reported net income of $352 million or $0.96 per share for the second quarter, higher than $324 million or $0.90 per share in the prior-year quarter.
Excluding items, comparable earnings for the quarter was $1.00 per share, compared to last year's $0.95 per share.
On average, 19 analysts polled by Thomson Reuters expected the company to earn $0.98 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 6.9 percent to $3.71 billion from $3.47 billion in the same quarter last year, but missed topped fifteen Wall Street analysts' consensus estimate of $3.81 billion.
Kellogg North America's second-quarter net sales increased 3.3 percent year-over-year to $2.4 billion, with internal sales declining 1.6 percent.
U.S. Snacks net sales increased 8 percent, with internal net sales declined 3.2 percent.
U.S. Specialty net sales grew 8.1 percent, with internal net sales growth of 1.9 percent, and North America other net sales increased 5 percent, with internal net sales growth of 3.9 percent.
Internationally, Latin American net sales grew 11.3 percent, with internal net sales growth of five percent and European net sales increased 17.9 percent, with internal net sales edging down 0.3 percent. Asia Pacific net sales increased 10 percent, with internal net sales growing 4.1 percent.
Looking ahead to fiscal 2013, the company continues to expect earnings in a range between $3.84 and $3.93 per share on a currency-neutral basis, excluding integration costs and the impact of mark-to-market accounting. Net sales growth is now expected to be about five percent, down from the previous projection of about seven percent growth.
Street is currently looking for full-year 2013 earnings of $3.84 per share on annual revenues of $15.13 billion.
K closed Wednesday's regular trading session at $66.24, down $0.40 on a volume of 2.21 million shares. In the past 52-week period, the stock has been trading in a range of $48.05 to $67.98.
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