US cereal maker Kellogg has reported higher third-quarter earnings, driven by increased sales, and raised its earnings guidance for the full year 2004.

The company reported net earnings of US$247.0m, or 59 cents per share, for the third quarter of 2004, compared to $231.3m, or 56 cents per share, in the comparable period of last year. Net sales in the third quarter increased by 7.2%, to $2.45bn. Excluding the effect of currency translation, Kellogg's internal sales growth was 4.8%.

Kellogg chairman and CEO Carlos Gutierrez said the company was pleased with the strong third-quarter results.

"We are especially pleased that we could generate strong sales and earnings growth while continuing to make significant investments in our business," said Gutierrez. "It is this investment, and our business momentum, that helps to provide visibility for the remainder of the year and into 2005."

Kellogg raised its earnings-per-share guidance for the full year 2004 to a range of $2.11 to $2.13, from its previous range of $2.07 to $2.11, due to "strong business momentum and excellent year-to-date results".

In the fourth quarter, the company expects low single-digit sales growth and net earnings lower than last year, due to significant reinvestment in cost-saving initiatives, a dramatic increase in brand-building activity, and a much higher tax rate than in the fourth quarter of 2003.

Kellogg also gave preliminary guidance for 2005 earnings-per-share of $2.28 to $2.32, in line with the company's long-term target of high single-digit growth.