Kellogg Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Kellogg (NYSE:K) will unveil its latest earnings on Thursday, November 1, 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 81 cents per share, a rise of 1.3% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate moved down. It has risen from 80 cents during the last month. Analysts are projecting profit to rise by 2.1% versus last year to $3.31.

Past Earnings Performance: Last quarter, the company reported net income of 89 cents per share versus a mean estimate of profit of. The company has beaten estimates for the past three quarters.

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A Look Back: In the second quarter, profit fell 12.2% to $301 million (84 cents a share) from $343 million (94 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 2.6% to $3.47 billion from $3.39 billion.

Wall St. Revenue Expectations: On average, analysts predict $3.69 billion in revenue this quarter, a rise of 11.5% from the year-ago quarter. Analysts are forecasting total revenue of $14.05 billion for the year, a rise of 6.4% from last year’s revenue of $13.2 billion.

Stock Price Performance: Between August 2, 2012 and October 26, 2012, the stock price rose $3.46 (7%), from $49.44 to $52.90. The stock price saw one of its best stretches over the last year between July 25, 2012 and August 3, 2012, when shares rose for eight straight days, increasing 8.3% (+$3.84) over that span. It saw one of its worst periods between October 17, 2012 and October 23, 2012 when shares fell for five straight days, dropping 2.3% (-$1.20) over that span.

Key Stats:

An income boost this time around would be welcome news after profit declines in the past two quarters. Net income dropped 2.2% in the first quarter and then again in the second quarter.

On the top line, the company is hoping to build on a revenue increase last quarter. Revenue fell 1.3% in the first quarter after increasing in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.7 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 0.8 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 14.8% to $4.61 billion while assets rose 0.6% to $3.21 billion.

Analyst Ratings: There are mostly holds on the stock with 16 of 20 analysts surveyed giving that rating.

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

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