Kellogg Company Earnings: Higher Expenses Shrinks Margins, Profit Declines

S&P 500 (NYSE:SPY) component Kellogg Company (NYSE:K) reported its results for the second quarter. Kellogg, with its subsidiaries, manufactures and markets ready-to-eat cereal and convenience foods, including cookies, crackers, and toaster pastries.

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Kellogg Company Earnings Cheat Sheet

Results: Net income for Kellogg Company fell to $301 million (84 cents per share) vs. $343 million (94 cents per share) a year earlier. This is a decline of 12.2% from the year-earlier quarter.

Revenue: Rose 2.6% to $3.47 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Kellogg Company fell in line with the mean analyst estimate of 84 cents per share. It fell short of the average revenue estimate of $3.6 billion.

Quoting Management: “We are pleased that our top-line performance improved in the second quarter. This year, we have taken strategic actions that have also made a difference in the near-term,” said John Bryant, Kellogg Company’s president and chief executive officer. “Last year we outlined a plan that focused the company on driving our two core growth platforms: cereal and snacks. The acquisition of the Pringles business takes us a long way toward achieving our goals and provides us with significant potential for future growth.”

Key Stats:

The company’s net income has fallen in each of the last two quarters. In the first quarter, net income fell 2.2% from the year-earlier quarter.

The company met estimates last quarter after toppling them in the two previous quarters. In the first quarter, it topped the mark by 2 cents, and in the fourth quarter of the last fiscal year, it was ahead by one cent.

Over the last five quarters, revenue has increased 4.4% on average year-over-year. The biggest increase came in the second quarter of the last fiscal year, when revenue rose 10.6% from the year-earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from 86 cents per share to 81 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At $3.35 per share, the average estimate for the fiscal year has fallen from $3.48 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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