Kellogg reports 8.6% rise in Q2 net earnings

US-based food company Kellogg has reported an 8.6% increase in net earnings for the second quarter of 2013 to $352m, compared with $324m for the same period in 2012.

For the quarter ended 29 June net revenues increased 6.1% to $3.71bn, compared with $3.47bn for the same period a year ago.

Kellogg stated that sales growth in the US was affected by more aggressive discounting by competitors as well as new alternatives to cereals including Greek yoghurt, smoothies and breakfast sandwiches.

Kellogg Company president and CEO John Bryant said that while sales growth has been slower than anticipated in developed markets, particularly in the US, the work the company has done on its cost base has enabled it to offset the impact.

"In addition, we have now owned Pringles for more than a year. The integration has gone very well, and we remain excited regarding the opportunities we see for future growth," Bryant added.

Kellogg North America’s net sales increased by 3.3% to $2.4bn; internal net sales decreased by 1.6%; operating profit increased by 6%; and internal operating profit increased by 3.2%.

The US Morning Foods segment reported a 3.3% decline in net sales to $863m, and the US Snacks business reported a 7.8% rise in net sales to $917m.

The US Specialty segment reported an 8.1% increase in net sales to $272m, while the North America Other segment reported 5.14% growth in sales to $388m driven by strong growth in the Frozen Food business.

The company’s Latin American business posted reported 11.3% growth in net sales to $304m; European region net sales increased by 17.9% to $723m; and the Asia Pacific segment reported a 10% rise in net sales to $247m driven by growth in Australia and both South-East Asia and India.

For the full-year, Kellogg expects earnings per share of $3.84 to $3.93 compared with previous guidance of $3.82 to $3.91, 5% growth in sales and cash flow to be between $1.1bn and $1.2bn.