However, all U.S. business segments but U.S. Specialty Channels reported net sales declines: 2% for U.S. Morning Foods, 3.8% for U.S. Snacks and 7.5% for North America Other, which includes U.S. frozen foods, Kashi and Canadian businesses.
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However, net income attributable to the company rose to $280 million, or 79 cents per share, in the second quarter ended July 2nd from $223 million, or 63 cents per share, a year earlier.
Kellogg shares have risen 12 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen almost 6 percent. Wall Street expected revenues of $3.36 billion for the quarter.
Net sales that were currency neutral increased during the quarter due to inflation related growth in sales for Venezuela, while currency neutral net sales that excluding the impact from Venezuela dropped modestly.
Kellogg raised its adjusted profit forecast for the year to $4.11-$4.18 per share from $4.00-$4.07, in constant currency, partly due to better-than-expected performance in Venezuela in the first half. The company xpects to achieve increased currency-neutral comparable operating profit by 15-17 percent compared to its earlier projection of 11-13 percent.
Kellogg attributed quarterly profit boosts to its Project K and zero-based budgeting initiatives, which have produced strong cost savings for the company.
The company believes its currency-neutral comparable operating profit growth excluding Venezuela for 2016 will come in at the high end of the 4-6% growth range previously communicated. Analysts expect annual earnings of $3.68 per share.
The company is expecting its cash flow from operating activities for the 2016 full year to be $1.7 billion and reaffirmed its cash flow for the full year including its capital expenditures to be $1.1 billion.
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It now believes it will increase this margin by approximately 350 basis points from 2015 levels, and that it will realize the increase through 2018, an acceleration of two years from its previous guidance.
