Kellogg posts narrower loss, stands by 2013 outlook

Tue Feb 5, 2013 11:50am EST
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By Martinne Geller

(Reuters) - Kellogg Co (K.N: Quote) reported a narrower quarterly loss on Tuesday, helped by its purchase of Pringles, and stood by its full-year forecast as the world's largest cereal company aims to convince Wall Street that troubling product recalls are behind it.

For Kellogg, 2012 was a transition year as it bought the Pringles snack business and reinvested in operations following several product recalls that shook investor confidence.

For 2013, Kellogg, the maker of Corn Flakes, Keebler cookies and Eggo waffles, expects profit growth of 5 percent to 7 percent, translating into earnings of $3.82 to $3.91 per share, including an accounting change and currency fluctuations, but excluding costs from integrating Pringles.

In the fourth quarter, Kellogg posted a net loss of $32 million, or 9 cents per share, compared with a loss of $195 million, or 54 cents per share, a year earlier.

Due to a change in the way Kellogg accounts for pensions, it recognized a year-end charge and removed pension-related amortization expenses from its results.

Excluding the mark-to-market accounting change, earnings were 65 cents per share, down from 71 cents per share a year earlier.

Net sales rose 18 percent to $3.56 billion. Excluding foreign currency translation, acquisitions, divestitures and integration costs, sales rose 5 percent.

That was much better than some analysts, including Janney Capital Markets' Jonathan Feeney, expected. Feeney said volume growth of 2.6 percent was the strongest performance since March 2007.   Continued...

Boxes of Kellogg's cereal are stacked in a supermarket in New York in this April 29, 2008 file photo. REUTERS/Lucas Jackson/Files