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Kellogg’s Posts Higher Net And Raises OutlookFiled at 3:00 p.m. ET GRAND RAPIDS, Mich. (AP) Kellogg Co. reported a 9 percent increase in third-quarter earnings Monday, but its profit forecast for 2008 was lower than Wall Streets prediction. It said rising prices for the ingredients that go into its flagship corn flakes, Keebler cookies, Pop-Tarts pastries and Eggo waffles were limiting profit growth. Pablo Zuanic, a securities analyst with JP Morgan, wrote that Kelloggs shares were also being hurt by overall sales growth that was below expectations. Its shares fell $1.93, or 3.6 percent, to $52.51 in afternoon trading. The worlds leading cereal producer earned $305 million, or 76 cents per share, in the July-September period, up from $281 million, or 70 cents per share, a year earlier. The companys performance beat the average estimate of analysts polled by Thomson Financial by 3 cents per share. Sales rose 6 percent to $3.1 billion from $2.8 billion a year ago. During Q3, we reinvested back into the business with double-digit increases in advertising and the funding of a major efficiency project within its distribution system, David Mackay, Kelloggs chief executive, said during a teleconference with industry analysts. Were confident that our consistent operating performance will continue into the fourth quarter, providing a strong foundation for another year of sustainable and dependable performance in 2008. The company raised its full-year guidance by a penny, to a range of $2.72-$2.75 per share. But the guidance is still below the $2.77 per share, on average, forecast by analysts. Kellogg also gave preliminary guidance for 2008 of $2.92 to $2.97 per share, less than the average of $3.04 that analysts predict. The company told analysts during a teleconference that next years internal operating profit will be hurt by significant investment in innovation and upfront costs, increased advertising and inflation. Rising prices for corn, wheat and other commodities appears to be a trend that will continue into the foreseeable future, Mackay said. Its a tough business environment when costs are going up, he said. Were taking a lot of moves to try and reduce our own costs. Morgan Stanley analyst Vincent Andrews wrote in an investors note that Kelloggs 2008 guidance is in line with the companys long-term growth objectives but below his earnings estimate of $3 per share. He said he expects Kelloggs guidance will likely prove conservative. Tag CloudExternal InformationAdditional InformationJPMorgan quintuples bid for Bear Stearns after investor pressure...J.M. Smucker Earnings Rise on Sales Growth... Bloomsbury lack magic touch without Potter to the fore... Jack Cole, Creator of People Locator, Dead at 87... Where Am I?News Main Page - Business - Kellogg’s Posts Higher Net And Raises Outlook |
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