Falling sales in the US and overseas have hit third-quarter profits at US food group Kellogg.

The cereal giant said today (2 November) that net earnings dropped 6% to US$338m for the quarter to 2 October.

Kellogg’s operating profit fell 4.5% to US$541m. Operating profit in North America dropped 3% due to lower sales and higher advertising costs.

The Crunchy Nut maker’s operating profit from its overseas businesses decreased 11% due to lower earnings in Latin America and Asia Pacific.

Kellogg’s top-line also worsened during the quarter. The company’s reported net sales slid 4% to $3.2bn on the back of a 3% fall in sales in North America and a 2% decrease in international sales.

“We are disappointed with our third quarter performance which was due to softness in our businesses as well as a tough operating and deflationary environment driven by intense competition,” said CEO David Mackay. “2010 has been a challenging year, and as a result, two weeks ago, we lowered our full-year guidance to reflect the operating challenges.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

For 2011, Kellogg expects internal net sales to grow in the “low single-digits”, in-line with its long-term growth targets.

However, the company said internal operating profit is expected to be flat or, at worst, down 2% reflecting its need “to reset incentive compensation levels”. Earnings per share on a currency-neutral basis are expected to grow by low single-digits.

Click here for the complete statement from Kellogg and click here for insight into the company’s conference call with Wall Street analysts.