Kellogg (K) Misses Q4 EPS by 9c; Trims Long-Term Sales Target Outlook

Kellogg (NYSE: K) reported Q4 EPS of $0.84, $0.09 worse than the analyst estimate of $0.93. Revenue for the quarter came in at $3.5 billion versus the consensus estimate of $3.6 billion.

Fourth quarter comparable net sales* decreased by 2.2 percent. Full-year 2014 reported net sales decreased by 1.4 percent to $14.6 billion.

Kellogg Issues Guidance for 2015

The company issued guidance for comparable net sales in 2015, which are expected to remain approximately unchanged year-over-year. Kellogg expects full-year 2015 comparable operating profit to decrease at a rate between two and four percent; this includes a negative impact of between three and four percentage points from the rebasing of incentive compensation for 2015. Full-year 2015 currency-neutral comparable earnings per share are anticipated to be in a range between two percent lower and approximately unchanged; this estimate also includes a negative impact of between three and four percentage points from the rebasing of incentive compensation for 2015. Guidance for both operating profit and earnings per share excludes the impact of mark-to-market adjustments, 2014's 53rd week, integration costs, costs related to Project K, acquisitions, dispositions, foreign-currency translation, and other items that could affect comparability. Cash flow is expected to be approximately $1.0 billion, which includes the cash required by Project K.

Kellogg Announces a Change to Its Long-Term Sales Target

The company also announced that it is making a change to its long-term financial targets. It now expects low-single-digit (one to three percent) comparable annual revenue growth, lower than the previous target of between three and four percent growth. The company's targets for mid-single-digit (four to six percent) annual comparable operating profit growth and high-single-digit (seven to nine percent) annual, currency-neutral comparable earnings per share growth remain unchanged.

For earnings history and earnings-related data on Kellogg (K) click here.

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