Sales from Kelloggs US morning foods division remain under pressure

Sales from Kellogg's US morning foods division remain under pressure

Shares in Kellogg climbed today (30 October) after it booked third-quarter earnings that beat Wall Street and company forecasts - but the US group continued to see domestic cereal sales come under pressure.

The owner of Special K and Pringles posted underlying earnings per share of US$0.94 for the three months to 27 September. The consensus forecast among analysts was for earnings to hit $0.92 a share.

Reported net income was $224m, compared to $326m in last year's third quarter.

Kellogg said its earnings per share and operating profit had beaten its expectations. Underlying internal operating profit, which excludes the effects of items like foreign currency translation, and M&A decreased by 1.8%.

Reported operating profit was $365m, down 27.5% due to costs associated with Kellogg's Project K restructuring programme, the impact of mark-to-market accounting and lower sales.

Third-quarter reported net sales fell 2.1% to $3.6bn. Internal net sales decreased by 1.7%.

In North America, internal net sales dropped 3.9%, with Kellogg's US morning foods division reporting a 4.7% decline. US snacks sales were down 4.2%.

Internal sales in Europe dipped 0.6%, rose 7.3% in Latin America and 5% in Asia Pacific.

"We are pleased to have announced results for quarterly operating profit and earnings per share that were ahead of our expectations. Our international business did well in the quarter, although we continued to face the challenges in developed regions and categories that we've seen all year," chairman and CEO John Bryant said.

Shares in Kellogg were up 3.17% at $64.46 at 11:50 ET.