Kellogg increases 2009 earnings guidance but says it will spend more on cost-cutting plan
By APThursday, July 30, 2009
Kellogg sees rosier earnings for full year
BATTLE CREEK, Mich. — Cereal and snack maker Kellogg Co. revised its second-quarter guidance Thursday and said it will invest more in its cost-cutting plan in 2009.
The Battle Creek, Michigan-based company said it is on track to save $1 billion annually by the end of 2011. It now expects to take a charge of 26 cents per share for the cost-cutting plan in 2009, up from the 14 cents it originally expected.
But it said it now expects earnings per share to grow 8 percent to 10 percent in 2009, sharpening its earlier forecast of high single-digit growth.
That implies earnings of $3.23 to $3.29 per share — or $2.97 to $3.03 excluding the 26 cents per share related to its cost cutting plan. Analysts predict annual earnings of $3.11 per share.
The company affirmed revenue guidance of 3 percent to 4 percent growth for the year excluding the effect of the stronger dollar and acquisitions.
The outlook came as the company said second-quarter profit rose 13 percent, boosted by higher prices and cost cutting, even though the stronger dollar hurt the company’s sales.
Shares rose 45 cents, or less than 1 percent, to $48.27 during morning trading.
