Kellogg Raises Outlook Despite Q2 Revenue Miss

Kellogg Company K announced in line earnings while its currency-neutral EPS was above the estimate, but revenue fell shy of the Street predictions. However, it boosted its outlook for 2016 to 2018.

The company reported 26.0 percent increase in reported net income to $280 million from $223 million and 25.4 percent growth in reported EPS to $0.79 from $0.63 in the year-ago period. Its comparable EPS, however, slipped 1.1 percent to $0.91 from $0.92 while currency-netral comparable EPS was $1.00. This was better than the Street estimate of $0.91.

Kellogg's reported net sales dipped 6.6 percent to $3.268 billion from $3.498 billion while comparable net sales fell 6.5 percent. On a currency-neutral basis, net sales would have advanced 8.6 percent. Analysts' predicted $3.36 billion revenue.

The breakfast food maker's chairman and CEO, John Bryant, said, "We're making good progress on our priorities: We have continued to improve our foods to insure they are on trend." He added, "We have carefully constructed a plan to boost our profit margins higher and sooner, giving us enhanced earnings visibility."

Moving ahead, the company boosted its EPS on a currency-neutral comparable basis to $4.11-$4.18 from $4.00-$4.07 projected earlier. Street is looking for an EPS of $3.68. The company xpects to achieve increased currency-neutral comparable operating profit by 15–17 percent compared to its earlier projection of 11–13 percent.