1:01 PM, Oct 29, 2019 — Kellogg (K) on Tuesday posted better-than-expected third-quarter results despite sales at the cereal company weighed down by the sale of some of its cookie and snacks businesses.
The Battle Creek, Mich.-based company reported adjusted per-share earnings of $1.03 on a diluted basis for the quarter ended Sept. 28, down from $1.06 in the prior-year period and above the consensus compiled by Capital IQ for $0.91. Net sales slid to $3.37 billion on a reported basis from $3.47 billion last year, ahead of the Street’s views for $3.35 billion.
Kellogg shares were 4.4% higher in early afternoon trading.
“We remain squarely on strategy and on plan, and this is reflected in our third-quarter results,” said Chief Executive Steve Cahillane. “Our reshaped portfolio is doing what it is intended to do, focusing on our higher growth categories and markets.”
Kellogg in late July completed the sale of its cookie businesses, which included the Keebler, Mother’s, Famous Amos and cookies made for the Girl Scouts of America, to Italy’s Ferrero Group in a $1.3 billion deal.
North American snack sales fell 1.4% on a reported basis due to the divestiture, Kellogg said. Cereal sales slid 4.9% “on category softness and only a gradual return to brand building activity following a pack-size harmonization in the first half of the year,” the company said.
Frozen foods edged up 0.5% on “increasing consumer awareness of plant-based meat alternatives and effective commercial programs” for Kellogg’s Morningstar Farms veggie foods, the company said.
European sales fell retreated 1% to $527 million while Latin American sales slid 2% to $244 million. Asia Pacific, Middle East and Africa sales rose 6%.
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