Kellogg said today (25 April) that its net profit dropped 2.2% in the first-quarter, as income was hit by weakness in Europe and higher raw material costs.
For the three months ended 31 March, Kellogg’s net income fell to US$358m from $366m last year. First-quarter operating profit was $535m, a decline of 6.5%, the group added.
The company said that revenue fell 1% to $3.44bn, down from $3.49bn. Revenue in Europe dropped 13%.
“While results in the first quarter were lower than we had planned due to weakness in Europe and certain other businesses, we are confident that we are taking the right actions and investing in the right places,” said John Bryant, Kellogg Co’s president and CEO.
The US cereal and snack group had issued a profit warning on Monday, informing the market that a weak performance from its European unit, category softness in the US and rising input costs would hit results.
Kellogg expects 2012 revenue, excluding currency exchange and acquisitions, to rise by 2-3%, down from the previous 4-5% range. The company expects profit of $3.18-3.30 per share this year, including a charge of 6-11 cents per share from its planned acquisition of Pringles from Proctor & Gamble.
The Pringles acquisition is expected to close this year and will make Kellogg the world’s second-largest snack group by sales, behind PepsiCo.
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