Kellogg Company Earnings: Yet Another Quarter of Profitability

S&P 500 (NYSE:SPY) component Kellogg Company (NYSE:K) reported its results for the fourth 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 for the Fourth Quarter

Results: Net income for the processed and packaged goods company rose to $232 million (64 cents per share) vs. $189 million (51 cents per share) in the same quarter a year earlier. This marks a rise of 22.8% from the year earlier quarter.

Revenue: Rose 5.4% to $3.02 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: Kellogg Company beat the mean analyst estimate of 63 cents per share. Analysts were expecting revenue of $2.99 billion.

Quoting Management: “In 2011 we started to build a foundation upon which we can grow,” said John Bryant, Kellogg Company’s president and chief executive officer. “We are pleased to have again posted very strong revenue growth and we have continued to make the investments necessary for future growth. Without the impact of the compensation costs and the supply-chain investment, our underlying operating profit increased in line with the company’s long-term target of mid single-digit growth. We will further improve our supply chain in 2012, but, as importantly, we will also focus our efforts on increasing investment in brand building and launching even stronger innovation.”

Key Stats:

Gross margin shrank 0.7 percentage point to 40.9%. The contraction appeared to be driven by increased costs, which rose 6.6% from the year earlier quarter while revenue rose 5.4%.

Revenue has risen the past four quarters. Revenue increased 4.9% to $3.31 billion in the third quarter. The figure rose 10.6% in the second quarter from the year earlier and climbed 5% in the first quarter from the year-ago quarter.

The company topped expectations last quarter after falling short of forecasts in the third quarter with net income of 80 cents versus a mean estimate of net income of 89 cents per share.

Net income has increased 3.4% year over year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 22.8% from the year earlier quarter.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the first quarter of the next fiscal year is $1.02 per share, down from $1.09 ninety days ago. The average estimate for the fiscal year is $3.37 per share, down from $3.48 ninety days ago.

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

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com