US-based food company Kellogg has reported that its net earnings for the third quarter of 2012 increased 2.5%to$296m or$0.82 per share,compared to$290m or$0.80 per share for the same period in the previous year,due to the strong performance of its recently acquired Pringles chips business.
In May 2012,Kellogg has completed the acquisition of potato and wheat-based snacks brand Pringles from Procter&Gamble(P&G)for$2.69bn,a deal which made it a global leading snack food manufacturer.
Net sales for the quarter rose 12.3%to$3.7bn,compared to$3.31bn in 2011.Organic sales,which exclude the effects of acquisitions,divestitures and currency translation,increased 2.8%,driven by pricing actions and increase in sales volume.
Operating profit for the quarter increased 3.2%to$479m,which was affected by higher commodity costs,brand-building investments,and a recall of its cereal product.
Kellogg initiated a recall of 2.8 million boxes of Mini-Wheats cereal last month due to the possible presence of metal mesh fragments,which cost the company about$0.06 per share.
Kellogg president and chief executive officer John Bryant said the company's performance,which saw strong revenue growth in several businesses,is in line with the expectations.
"We're also pleased that the Pringles business performed better during the quarter than we had expected,"Bryant added.
For the full year,Kellogg stood by its outlook of earnings per share of$3.18 to$3.30,but noted that its operating profit will decline between 4%and 6%due to the Mini-Wheats recall.
