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Kellogg Third Quarter Earnings
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Kellogg Company (NYSE:K) announced its results for the most recent quarter on November 1, 2012. Kellogg, with its subsidiaries, manufactures and markets ready-to-eat cereal and convenience foods, including cookies, crackers, and toaster pastries.
Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: 5 Tricks Companies Use During Earnings Season
The Numbers: Kellogg posted revenues above analyst predictions, though the company's EPS came up short of expectations. The company reported 82 cents per share versus the 84 cents per share estimate and revenues of $3.72 billion versus the $3.6 billion estimate. EPS rose 2.5% while revenue climbed 12.3% from the same period last year. Revenue rose for a second quarter in a row as Kellogg's sales grew 2.6% to $3.47 billion in the second quarter as well. Kellogg's net income for the third quarter was $296 million. According to the reported number, this is up 2.1% from last year's figures. Last quarter's profit boost ends a two-quarter streak of year-over-year profit decreases.
Management Quote: "We're pleased with the improving trends in our underlying performance, which is in-line with our expectations and includes strong revenue growth in many of our businesses," said John Bryant, Kellogg Company's president and chief executive officer. "We're also pleased that the Pringles business performed better during the quarter than we had expected. While it's early, we remain optimistic regarding the potential of this iconic brand."
A Look Back: Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell two percentage points to 38.8% from the year-earlier quarter. Over that time, margins have contracted on average 1.6 percentage points per quarter on a year-over-year basis.
Net income has dropped 0.8% year-over-year on average across the last five quarters. Performance was hurt by a 14.2% decline in the third quarter of the last fiscal year from the year-earlier quarter.
Looking Ahead: The outlook for the company's results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 81 cents per share, down from 86 cents 90 days ago. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. At $3.35 per share, the average estimate for the fiscal year has fallen from $3.48 90 days ago.
Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: 5 Tricks Companies Use During Earnings Season
The Numbers: Kellogg posted revenues above analyst predictions, though the company's EPS came up short of expectations. The company reported 82 cents per share versus the 84 cents per share estimate and revenues of $3.72 billion versus the $3.6 billion estimate. EPS rose 2.5% while revenue climbed 12.3% from the same period last year. Revenue rose for a second quarter in a row as Kellogg's sales grew 2.6% to $3.47 billion in the second quarter as well. Kellogg's net income for the third quarter was $296 million. According to the reported number, this is up 2.1% from last year's figures. Last quarter's profit boost ends a two-quarter streak of year-over-year profit decreases.
Management Quote: "We're pleased with the improving trends in our underlying performance, which is in-line with our expectations and includes strong revenue growth in many of our businesses," said John Bryant, Kellogg Company's president and chief executive officer. "We're also pleased that the Pringles business performed better during the quarter than we had expected. While it's early, we remain optimistic regarding the potential of this iconic brand."
A Look Back: Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell two percentage points to 38.8% from the year-earlier quarter. Over that time, margins have contracted on average 1.6 percentage points per quarter on a year-over-year basis.
Net income has dropped 0.8% year-over-year on average across the last five quarters. Performance was hurt by a 14.2% decline in the third quarter of the last fiscal year from the year-earlier quarter.
Looking Ahead: The outlook for the company's results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 81 cents per share, down from 86 cents 90 days ago. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. At $3.35 per share, the average estimate for the fiscal year has fallen from $3.48 90 days ago.
by
Investopedia Staff
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