Cereal maker Kellogg Co. (K) on Thursday reported a loss for the fourth quarter, reflecting one-time charges and weak sales in Europe as well as Asia-Pacific. Both revenue and adjusted earnings per share for the quarter missed analysts' expectations. In addition, the company lowered its long-term comparable annual revenue growth outlook.
The Battle Creek, Michigan-based maker of Rice Krispies, Pop-Tarts and Eggo waffles reported fourth-quarter net loss attributable to the company of $293 million or $0.82 per share, compared to net income of $818 million or $2.24 per share in the prior-year quarter.
Results for the latest quarter include an impact from mark-to-market of $0.52 per share, costs associated with Project K of $0.16 per share, and integration costs of $0.04 per share. Project K is the company's longer-term cost-cutting plan.
Excluding items, comparable earnings for the quarter were $0.84 per share, compared to $0.85 per share in the year-ago period. Currency-neutral comparable earnings per share for the latest-quarter was $0.86 per share.
On average, 19 analysts polled by Thomson Reuters expected the company to earn $0.93 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter edged up 0.3 percent to $3.51 billion from $3.50 billion in the same quarter last year, and missed analysts' consensus estimate of $3.65 billion.
Excluding the effects of foreign currency translation, acquisitions, dispositions, costs associated with the efficiency-and-effectiveness program, among others, comparable net sales for the quarter decreased by 2.2 percent.
Kellogg North America's net sales increased 2.3 percent year-over-year to $2.30 billion, while comparable net sales declined 3.9 percent.
U.S. Morning foods net sales edged up less than 1 percent and U.S. Snacks net sales rose 2 percent from last year. U.S. Specialty net sales grew 4 percent, and North America other net sales increased 4 percent from the year-ago quarter.
Internationally, Latin American net sales grew 2 percent, while European net sales declined 5 percent and Asia Pacific net sales decreased 4 percent.
For fiscal 2014, Kellogg's net earnings were $632 million or $1.75 per share, down from $1.81 billion or $4.94 per share last year.
Comparable earnings for the year were $3.81 per share, compared to $3.85 per share in the prior year. Currency-neutral comparable earnings for the year were $3.82 per share.
Net sales for the year declined 1 percent to $14.58 billion from $14.79 billion in the prior year. Full-year comparable net sales decreased by 2 percent.
Street expected the company to earn $3.90 per share for the year on revenues of $14.71 billion.
Looking ahead to fiscal 2015, Kellogg forecasts currency-neutral comparable earnings per share in a range between 2 percent lower and about unchanged from $3.82 per share in 2014.
The outlook includes a negative impact of between 3 and 4 percentage points from the rebasing of incentive compensation for 2015.
Kellogg expects full-year 2015 comparable operating profit to decrease at a rate between 2 percent and 4 percent, including a negative impact of between 3 and 4 percentage points from the rebasing of incentive compensation for 2015.
The company also forecast full-year comparable net sales to remain approximately unchanged year-over-year.
Analysts expect the company to report earnings of $4.01 per share for the year on revenues of $14.43 billion.
Further, Kellogg said it is making a change to its long-term financial targets. It now expects low-single-digit, or 1 percent to 3 percent comparable annual revenue growth, down from the previous target of between 3 percent and 4 percent growth.
However, the company's targets for mid-single-digit, or 4 percent to 6 percent annual comparable operating profit growth, and high-single-digit, or 7 percent to 9 percent annual, currency-neutral comparable earnings per share growth remain unchanged.
K closed Wednesday's trading at $66.30. In Thursday's pre-market activity, the stock is down $3.30 or 4.98 percent to $63.00.
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