Kellogg Reports In-Line Earnings and Guidance (K)

Kellogg K reported EPS of $1.00 vs. $1.03 estimate. Revenues $3.5B vs. $3.4B estimate. Kellogg guides FY 2011 EPS of $3.42-3.49 vs. $3.48 estimate. The company today announced that first quarter 2011 reported net sales increased 5 percent to $3.5 billion. Internal net sales, which exclude the effects of foreign currency translation, rose 3 percent over the same period. First quarter 2011 operating profit was $572 million, a decline of 10 percent on a reported basis and 12 percent on an internal basis. The decline is attributed to increased input costs and a double-digit increase in brand building as the Company reinvested to drive momentum. The benefit from recent pricing actions was not fully reflected in first quarter results. In addition, the Company is lapping a difficult year-over-year comparison with first quarter 2010 internal operating profit growth of 17 percent. Reported earnings for the first quarter 2011 were $366 million, or $1.00 per diluted share, a decline of 8 percent from first quarter 2010 reported earnings of $1.09 per diluted share. On a currency-neutral basis, first quarter 2011 earnings per share declined 10 percent compared with first quarter 2010 currency-neutral earnings per share growth of 27 percent. "We had a solid start to 2011, exceeding our internal expectations for the quarter. Our top-line growth reflects our increased emphasis on innovation, investment in brand building and net price realization. Our momentum is building, as demonstrated by strong share gains in most of our U.S. categories," said John Bryant, Kellogg Company's president and chief executive officer. "We are raising our full-year 2011 internal net sales guidance to approximately 4 percent to offset higher input costs, and we are on track to meet our operating profit and currency-neutral 2011 EPS guidance. We will continue to leverage the power of our brands to achieve our goals for 2011 and remain focused on delivering sustainable growth over the long term."