Investors Cheer as Kellogg (K) Posts 25% Surge in Q4 Profit
Shares of Kellogg Company (NYSE: K) are trading up more than 3 percent Thursday morning following earlier fourth-quarter results.
Compared to the fourth quarter of 2010, the company's net sales rose 5.4 percent to $3.0 billion. Revenue also topped the Street’s consensus of $2.99 billion. Kellogg’s North America’s segment net sales grew 6.6 percent during the quarter, while international sales rose by 2.9 percent.
The cost of goods sold rose 6.6 percent year over year to $1.781 billion as selling, general and administrative expenses fell 2.8 percent to $837 million.
Total operating profit was $397 million, a increase of 20.3 percent as internal operating profits rose by 20.5 percent.
Fourth-quarter net earnings grew 25.4 percent from the year-ago quarter to $232 million, or $0.64 per diluted share. The company issued fourth quarter 2010 earnings of $0.51 per diluted share. The Street’s consensus called for $0.62 per share in earnings.
The company finished 2011 with $460 million in cash and cash equivalents, $16 million more than the company began the year with.
"In 2011 we started to build a foundation upon which we can grow," said John Bryant, Kellogg Company's president and chief executive officer. "We are pleased to have again posted very strong revenue growth and we have continued to make the investments necessary for future growth. Without the impact of the compensation costs and the supply-chain investment, our underlying operating profit increased in line with the company's long-term target of mid single-digit growth. We will further improve our supply chain in 2012, but, as importantly, we will also focus our efforts on increasing investment in brand building and launching even stronger innovation."
The Company reaffirmed its guidance for internal net sales growth of 4 to 5 percent, greater than long-term annual targets and reflecting both improvement in price/mix and a stronger innovation pipeline. Kellogg expects full-year operating profit to be unchanged or slightly greater as the company continues to invest in future growth. Full-year currency-neutral earnings per share are anticipated to grow between 2 and 4 percent including the impact of continued investments in supply chain, an update of the company's SAP platform, an increase in the level of investment in brand building, and a benefit from the three-year $2.5 billion share repurchase program.
Compared to the fourth quarter of 2010, the company's net sales rose 5.4 percent to $3.0 billion. Revenue also topped the Street’s consensus of $2.99 billion. Kellogg’s North America’s segment net sales grew 6.6 percent during the quarter, while international sales rose by 2.9 percent.
The cost of goods sold rose 6.6 percent year over year to $1.781 billion as selling, general and administrative expenses fell 2.8 percent to $837 million.
Total operating profit was $397 million, a increase of 20.3 percent as internal operating profits rose by 20.5 percent.
Fourth-quarter net earnings grew 25.4 percent from the year-ago quarter to $232 million, or $0.64 per diluted share. The company issued fourth quarter 2010 earnings of $0.51 per diluted share. The Street’s consensus called for $0.62 per share in earnings.
The company finished 2011 with $460 million in cash and cash equivalents, $16 million more than the company began the year with.
"In 2011 we started to build a foundation upon which we can grow," said John Bryant, Kellogg Company's president and chief executive officer. "We are pleased to have again posted very strong revenue growth and we have continued to make the investments necessary for future growth. Without the impact of the compensation costs and the supply-chain investment, our underlying operating profit increased in line with the company's long-term target of mid single-digit growth. We will further improve our supply chain in 2012, but, as importantly, we will also focus our efforts on increasing investment in brand building and launching even stronger innovation."
The Company reaffirmed its guidance for internal net sales growth of 4 to 5 percent, greater than long-term annual targets and reflecting both improvement in price/mix and a stronger innovation pipeline. Kellogg expects full-year operating profit to be unchanged or slightly greater as the company continues to invest in future growth. Full-year currency-neutral earnings per share are anticipated to grow between 2 and 4 percent including the impact of continued investments in supply chain, an update of the company's SAP platform, an increase in the level of investment in brand building, and a benefit from the three-year $2.5 billion share repurchase program.