S&P 500 (NYSE:SPY) component Kellogg (NYSE:K) will unveil its latest earnings tomorrow, Thursday, August 2, 2012. Kellogg, with its subsidiaries, manufactures and markets ready-to-eat cereal and convenience foods, including cookies, crackers, and toaster pastries.
Kellogg Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average analyst estimate is for profit of 84 cents per share, a decline of 10.6% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 86 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 84 cents during the last month. Analysts are projecting profit to rise by 0.6% versus last year to $3.36.
Past Earnings Performance: The company is looking to top estimates for the third straight quarter. Last quarter, it reported net income of $1 per share against a mean estimate of profit of 98 cents, and the quarter before, the company exceeded forecasts by one cent with net income of 64 cents versus a mean estimate of profit of 63 cents.
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Stock Price Performance: Between May 2, 2012 and July 31, 2012, the stock price fell $2.30 (-4.6%), from $50.00 to $47.70. The stock price saw one of its best stretches over the last year between April 9, 2012 and April 17, 2012, when shares rose for seven straight days, increasing 1.7% (+89 cents) over that span. It saw one of its worst periods between July 28, 2011 and August 4, 2011 when shares fell for six straight days, dropping 6.1% (-$3.41) over that span.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.8 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company regressed in this liquidity measure from 0.91 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 21.1% to $4.01 billion while assets rose 5.5% to $3.19 billion.
A Look Back: In the first quarter, profit fell 2.2% to $358 million ($1 a share) from $366 million ($1 a share) the year earlier, but exceeded analyst expectations. Revenue fell 1.3% to $3.44 billion from $3.48 billion.
On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 10.6% in the second quarter of the last fiscal year, 4.9% in the third quarter of the last fiscal year and 5.4%in the fourth quarter of the last fiscal year before dropping in the first quarter.
There has enjoyed solid performance recently heading into this earnings announcement with profit rising by a year-over-year average of 5% for the last four quarters.
Analyst Ratings: There are mostly holds on the stock with 15 of 19 analysts surveyed giving that rating.
Wall St. Revenue Expectations: On average, analysts predict $3.39 billion in revenue this quarter, no change from the year-ago quarter. Analysts are forecasting total revenue of $14 billion for the year, a rise of 6.1% from last year’s revenue of $13.2 billion.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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