Kellogg announced first-quarter results for earnings per share that were greater than the company's expectations; results for operating profit were in-line with expectations. First quarter 2014 reported net sales decreased by 3.1 percent to $3.7 billion.
Internal net sales,* which exclude the effects of foreign currency translation, acquisitions, dispositions, and integration costs, decreased by 2.4 percent over the same period. First quarter 2014 operating profit was $614 million, a reported increase of 22.1 percent; this increase was driven primarily by the impact that asset returns and changes in interest rates had on pension plans.
Underlying internal operating profit,* which excludes the effects of foreign currency translation, acquisitions, dispositions, mark-to-market accounting, integration costs, and costs associated with Project K, decreased by 5.5 percent. As expected, the decline in underlying internal operating profit was largely the result of lower sales and the timing of costs of goods sold in the period.
Reported earnings for the first quarter 2014 were $406 million, or $1.12 per diluted share, an increase of 32 percent from the $0.85 per diluted share reported in the first quarter of last year. This quarter's reported earnings per share included an impact from mark-to-market of $0.22 per share, partially offset by $0.10 per share of costs associated with Project K and approximately $0.01 per share of integration costs related to the acquisition of Pringles.
Excluding these items, comparable first quarter 2014 earnings* were $1.01 per share, greater than the company's expectations as the result of the impact of a $0.03 per share benefit in Other Income and Expense.
"Our results for operating profit and earnings in the first quarter were broadly in-line with the expectations we highlighted on the last earnings call," said John Bryant, Kellogg Company's president and chief executive officer.
