Kellogg's Earnings Grow 13% in Second Quarter

Better-than-expected results prompt the packaged-goods manufacturer to raise its full-year earnings-per-share guidance.

A strong focus on cost-saving measures helped propel Kellogg Co. to better-than-expected financial results for the second quarter of fiscal 2009. While net sales for the quarter, at $3.2 billion, were down 3% from the same quarter a year ago, net earnings reached $354 million, a 13% increase over the same period one year ago. Earnings per share were 92 cents for the quarter, which represents a year-over-over increase of 12% on a reported basis.

"We remain committed to delivering sustainable and dependable performance as we work through the current tough economic environment," said David Mackay, Kellogg's chief executive officer, in announcing the results. "This focus continued to provide strong returns in the second quarter, which were ahead of expectations."

Operating profit of $553 million was a 4% increase over the same period a year ago.

The consumer-packaged goods company said up-front costs for cost-reduction initiatives were about 7 cents per share in the quarter. Kellogg stated that it is on track to deliver $1 billion in annualized savings from efficiency initiatives by year-end 2011.

Kellogg raised its full-year 2009 earnings-per-share guidance to a range of 8% to 10% on a currency-neutral basis. That includes a significant increase in up-front charges for cost-reduction initiatives to 26 cents per share from an initial forecast of 14 cents per share.

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