Kellogg Lowers 2012 Outlook, Shares Fall
NEW YORK (TheStreet) -- Kellogg(K) , the cereal maker, reduced its full-year 2012 earnings guidance Monday following weaker-than-expected first-quarter results.
Kellogg said first-quarter net sales dropped 1.3%, and operating profit fell 6.5%. The company's first-quarter earnings were $1 a share, including a gain of 5 cents a share from hedges related to its pending acquisition of Pringles. Analysts were expecting earnings of 99 cents a share.
"We are obviously disappointed with the performance of the Company in the first quarter of 2012," CEO John Bryant said in a statement. "We faced more significant challenges in both Europe and in some categories in the U.S. than we expected. We have recognized and are addressing these issues, and have provided revised guidance that allows us to continue to invest in the business. This investment is at the core of our operating principles, it's the right thing to do for the health of the business, and it will help drive future growth."
The company anticipates internal net sales to rise in 2012 between 2% and 3%; previously Kellogg guided to an increase in sales of between 4% and 5%.
Kellogg's full-year earnings per share are expected to be between $3.18 and $3.30; the acquisition of Procter & Gamble's Pringles will lower earnings between 6 cents and 11 cents a share.
Shares of Kellogg declined 5.6% in premarket trading Monday to $50.99. The stock has risen 6.76% year to date.