Kellogg Company (K, Financial) filed Quarterly Report for the period ended 2010-10-02.
Kellogg Company has a market cap of $18.62 billion; its shares were traded at around $49.31 with a P/E ratio of 14.6 and P/S ratio of 1.5. The dividend yield of Kellogg Company stocks is 3.3%. Kellogg Company had an annual average earning growth of 7.4% over the past 10 years. GuruFocus rated Kellogg Company the business predictability rank of 4.5-star.K is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., Jean-Marie Eveillard of First Eagle Investment Management, LLC, Manning & Napier Advisors, Inc, Pioneer Investments, Jeremy Grantham of GMO LLC, Robert Bruce of Bruce & Co., Inc., PRIMECAP Management, Bruce Kovner of Caxton Associates, Paul Tudor Jones of The Tudor Group, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors, Bill Frels of Mairs & Power Inc. , George Soros of Soros Fund Management LLC.
For the quarter ended October 2, 2010, our reported net sales decreased 4% compared to the same period last year; internal net sales decreased 2%. Consolidated operating profit decreased 5%, while internal operating profit decreased 3%. Diluted earnings per share (EPS) declined 4% to $0.90, compared to $0.94 in the comparable prior period. EPS on a currency neutral basis was down 2%.
On a year-to-date basis, our reported net sales were down 1%, with internal net sales down 2%. Consolidated operating profit increased 1% on a reported basis and 1% on an internal basis. Diluted EPS was up 3%, at $2.78, compared to $2.70 in the prior year. EPS on a currency neutral basis was up 4%.
Our International operating segments internal net sales were down 2% compared to the prior year. Europes internal net sales declined 5% in the third quarter. We are seeing price deflation in many food categories across Europe, especially in the U.K. Continued weakness in the Russia snack business drove lower volumes and contributed to Europes lower top line results. Latin Americas internal net sales growth was up 5%, on top of last years strong 9% growth. Cereal growth across the region mitigated a decline in snacks. Our decline in snacks is largely driven by Venezuela where we import products from Mexico. The imports have been impacted by exchange rate controls in Venezuela. Internal net sales in Asia Pacific grew 2% driven by strong performance across Asia and South Africa. This was muted by a decline in Australia where the cereal category is facing price deflation.
Consolidated operating profit declined by 5% on an as reported basis and by 3% on an internal basis, when excluding the impact of foreign currency translation. Softness in sales, increased investment in advertising, a decrease in volume going
Internal operating profit in North America decreased by 3%, Europes grew by 2%, Latin Americas declined by 18% and Asia Pacifics declined by 17%. North Americas operating profit was negatively impacted by increased promotional activity in the cereal category, the ongoing impact of the second quarter 2010 voluntary recall as well as a slower than anticipated rebound in our waffle business. In addition, higher supply chain costs and increased advertising contributed to the decline. This was partially offset by lower up-front costs and lower incentive compensation expense. Europes increase in internal operating profit was attributable to supply chain efficiencies, lower up-front costs and a decrease in incentive compensation expense. Latin Americas decline was due primarily to increased commodity costs, incremental operating and distribution costs in Mexico as well as overhead inflation and a modest increase in advertising. Asia Pacifics decline was due to increased investments in advertising and promotion. Corporate benefited from lower incentive compensation expense.
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Kellogg Company has a market cap of $18.62 billion; its shares were traded at around $49.31 with a P/E ratio of 14.6 and P/S ratio of 1.5. The dividend yield of Kellogg Company stocks is 3.3%. Kellogg Company had an annual average earning growth of 7.4% over the past 10 years. GuruFocus rated Kellogg Company the business predictability rank of 4.5-star.K is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., Jean-Marie Eveillard of First Eagle Investment Management, LLC, Manning & Napier Advisors, Inc, Pioneer Investments, Jeremy Grantham of GMO LLC, Robert Bruce of Bruce & Co., Inc., PRIMECAP Management, Bruce Kovner of Caxton Associates, Paul Tudor Jones of The Tudor Group, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors, Bill Frels of Mairs & Power Inc. , George Soros of Soros Fund Management LLC.
Highlight of Business Operations:
We manage our Company for sustainable performance defined by our long-term annual growth targets. These targets are low single-digit (1 to 3%) for internal net sales, mid single-digit (4 to 6%) for internal operating profit, and high single-digit (7 to 9%) for net earnings per share on a currency neutral basis. Internal net sales and internal operating profit exclude the impact of foreign currency translation, acquisitions, dispositions and shipping day differences. See the Foreign currency translation section for an explanation of managements definition of currency neutral.For the quarter ended October 2, 2010, our reported net sales decreased 4% compared to the same period last year; internal net sales decreased 2%. Consolidated operating profit decreased 5%, while internal operating profit decreased 3%. Diluted earnings per share (EPS) declined 4% to $0.90, compared to $0.94 in the comparable prior period. EPS on a currency neutral basis was down 2%.
On a year-to-date basis, our reported net sales were down 1%, with internal net sales down 2%. Consolidated operating profit increased 1% on a reported basis and 1% on an internal basis. Diluted EPS was up 3%, at $2.78, compared to $2.70 in the prior year. EPS on a currency neutral basis was up 4%.
Our International operating segments internal net sales were down 2% compared to the prior year. Europes internal net sales declined 5% in the third quarter. We are seeing price deflation in many food categories across Europe, especially in the U.K. Continued weakness in the Russia snack business drove lower volumes and contributed to Europes lower top line results. Latin Americas internal net sales growth was up 5%, on top of last years strong 9% growth. Cereal growth across the region mitigated a decline in snacks. Our decline in snacks is largely driven by Venezuela where we import products from Mexico. The imports have been impacted by exchange rate controls in Venezuela. Internal net sales in Asia Pacific grew 2% driven by strong performance across Asia and South Africa. This was muted by a decline in Australia where the cereal category is facing price deflation.
Consolidated operating profit declined by 5% on an as reported basis and by 3% on an internal basis, when excluding the impact of foreign currency translation. Softness in sales, increased investment in advertising, a decrease in volume going
Internal operating profit in North America decreased by 3%, Europes grew by 2%, Latin Americas declined by 18% and Asia Pacifics declined by 17%. North Americas operating profit was negatively impacted by increased promotional activity in the cereal category, the ongoing impact of the second quarter 2010 voluntary recall as well as a slower than anticipated rebound in our waffle business. In addition, higher supply chain costs and increased advertising contributed to the decline. This was partially offset by lower up-front costs and lower incentive compensation expense. Europes increase in internal operating profit was attributable to supply chain efficiencies, lower up-front costs and a decrease in incentive compensation expense. Latin Americas decline was due primarily to increased commodity costs, incremental operating and distribution costs in Mexico as well as overhead inflation and a modest increase in advertising. Asia Pacifics decline was due to increased investments in advertising and promotion. Corporate benefited from lower incentive compensation expense.
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