US: Kellogg FY sales, profits up; trims '09 guidance

By: just-food.com | 5 February 2009

Kellogg today (5 February) posted a rise in 2008 sales and earnings but trimmed its revenue target for 2009.

The US-based cereals and snacks giant posted a 9% rise in reported net sales to US$12.8bn for the year to 3 January, helped in part by an extra selling week.

Kellogg said "internal net sales" - which strips out the impact of foreign exchange, acquisitions, and the extra week - rose 5%.

Reported net earnings were up 4% to $1.15bn, while annual earnings per share rose 8% to $2.99 against the company's most recent estimate of $2.95-300.

"Kellogg delivered another year of sustainable and dependable results, despite significant cost pressures and the stress the economy is placing on consumers," said CEO David Mackay.

However, Kellogg cut its 2009 sales forecast from a target of internal sales growth in the mid-single digits to 3-4%.

Mackay said: "We remain confident in our ability to deliver another year of sustainable and dependable performance. For 2009, we will focus on driving solid top-line growth as well as further cost-savings initiatives."

Looking at Kellogg's results in the fourth quarter of 2008, sales rose 5% to $2.93bn; internal net sales growth stood at 3%. Reported net earnings in the fourth quarter inched up from $176m, or $0.44 per diluted share a year ago, to $179m, or $0.47 a share, in 2008.

Kellogg said its fourth-quarter results included a negative impact from the ongoing peanut salmonella outbreak in the US. A clutch of Kellogg products have been caught up in the scare, which has been linked to one of the company's suppliers, Peanut Corporation of America.

Kellogg said its fourth-quarter results include an "adverse effect" of six cents a share due to the salmonella outbreak and associated recalls.

Sectors: Bakery, Snacks

Companies: Kellogg, Peanut Corporation of America