Cereal maker Kellogg Co. (K) reported Thursday a profit for the first quarter that declined from last year, despite double-digit sales growth, hurt by higher grains prices.
Earnings per share and quarterly revenues missed analysts' expectations. However, the company reaffirmed its earnings and revenue growth guidance for the full-year 2013.
The company also announced that the Board approved a share repurchase authorization of $1 billion, which expires in April of 2014.
"Results in the first quarter were broadly as we expected, and we're pleased to have a solid start to the year. We saw good comparable revenue growth in many regions around the world and the Pringles business continued to post strong results," President and CEO John Bryant said in a statement.
The Battle Creek, Michigan-based maker of Rice Krispies, Pop-Tarts, Eggo waffles and Morningstar Farms brands reported net income of $311 million or $0.85 per share for the first quarter, down from $351 million or $0.98 per share in the prior-year quarter.
The results for the latest quarter include $0.10 per share mart-to-market adjustments, and a $0.04 per share of costs associated with the integration of the Pringles business.
Excluding items, comparable earnings for the quarter was $0.99 per share, compared to $1.08 per share last year.
On average, 19 analysts polled by Thomson Reuters expected the company to earn $1.03 per share for the first quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 12.2 percent to $3.86 billion from $3.44 billion in the same quarter last year, but missed fifteen Wall Street analysts' consensus estimate of $3.94 billion.
Internal net sales, excluding the effects of foreign currency translation, increased only 2.2 percent.
Kellogg North America's first-quarter sales increased 8.1 percent year-over-year to $2.6 billion, Kellogg's Europe sales grew 28.7 percent to $692 million, and Kellogg's Latin America sales improved 13.7 percent to $308 million from the year-ago quarter. Net sales in Asia Pacific increased 14.7 percent $267 million from last year.
Operating profit for the quarter declined 4.5 percent to $503 million from last year.
Looking ahead to fiscal 2013, the company continues to expect adjusted earnings in a range of $3.82 and $3.91 per share, excluding the anticipated impact of the Pringles purchase, and the impact of mark-to-market accounting. Net sales growth is also still projected at about seven percent.
Street is currently looking for full-year 2013 earnings of $3.87 per share on annual revenues of $15.25 billion.
In Thursday's regular trading session, K is currently trading at $63.66, down $0.95 or 1.47% on a volume of 0.43 million shares. In the past 52-week period, the stock has been trading in a range of $46.33 to $66.84.
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