DOW JONES NEWSWIRES
Kellogg Co.'s (K) third-quarter profit grew 5.6% as the U.S.'s largest cereal maker cut costs and posted better-than-expected results.
The packaged food company affirmed its 2009 sales projection, but raised its earnings forecast to 10% to 12% growth on a currency-neutral basis, up two percentage points.
Lower commodity prices have helped large food makers who were hurt last year as their raw material costs surged. But pricing has been an issue for food makers, as retailers have pushed for price rollbacks and promotions to draw store traffic.
Chief Executive David Mackay said Thursday that Kellogg was pursuing productivity initiatives, as well as investing more into advertising to drive long-term growth.
Kellogg--whose brands include Rice Krispies, Pop-Tarts, Eggo waffles and Morningstar Farms--posted a profit of $361 million, or 94 cents a share, up from $342 million, or 89 cents a share, a year earlier.
Revenue slid 0.3% to $3.28 billion. Internal sales--which exclude currency fluctuations, acquisitions and differences in the number of shipping days--rose 3%.
Analysts polled by Thomson Reuters expected earnings of 84 cents on revenue of $3.27 billion.
Gross margin improved to 43.9% from 42.7%.
Sales jumped 1% in North America, and grew 2% on an internal basis, on strength in cereal and snacks. International internal sales were up 6%, with Latin America up 9%. Europe climbed 5%.
Shares were inactive in premarket trading after closing Wednesday at $49.99.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com