US cereal maker Kellogg has reported a 34% rise in first-quarter earnings, boosted by an 11% increase in sales.
The company, whose products include Rice Krispies, Pop-Tarts and Nutri-Grain, posted net earnings of US$219.8m, or 53 cents per share, for the first quarter to 27 March, compared to $163.9m, or 40 cents per share, for the year-ago period.
Kellogg attributed the performance to sales growth momentum across the company, as a result of “brand-building investment, successful product innovation and solid execution”.
Net sales increased 11% to $2.4bn. Excluding foreign currency effects, sales growth was 6.5%.
“Our sales growth was exceptional and broad-based. We overcame substantially higher commodity and benefits costs, and we reinvested for the future by boosting our brand building and absorbing expenses related to cost-reduction projects. And through it all, we were able to significantly exceed our original forecasts for earnings and cash flow,” said CEO Carlos Gutierrez.
Kellogg reiterated its earnings per share guidance for 2004 of between $2.07 and $2.11, which the company recently upgraded from a previous range of $2.05 to $2.09.