BATTLE CREEK, MICH. — Net earnings at The Kellogg Co. in the second quarter ended June 28 totaled $312 million, equal to 82c per share on the common stock, up 4% from $301 million, or 76c per share, in the same period a year ago.
Net sales were $3,343 million, up 11% from $3,015 million a year ago.
For the first six months of fiscal 2008, net income totaled $627 million, or $1.64 per share, up narrowly from $622 million, or $1.56 per share. Net sales were $6,601 million, up from $5,978 million.
"Our first-half performance provides further evidence of the strength of our business model and strategy," said David Mackay, chief executive officer. "Despite significant inflation headwinds, we capitalized on our momentum to further increase our investment in future growth. We increased our earnings guidance and acquired two businesses in emerging markets within the first half of the year, and we continue to utilize our strong cash flow to return profits to our shareholders through dividends and share repurchases."
Operating profit at Kellogg North America rose 4% to $380 million buoyed by a 7% gain in net sales to $2,127 million.
Retail Cereal posted internal sales growth of 5%, while Retail Snacks had sales growth of 6%. The North America Frozen and Specialty Channels posted internal net sales growth of 10%.
At Kellogg International, net sales grew approximately 17%. The company’s Latin American region posted internal sales growth of 7% during the second quarter, while Europe grew by 5% and the Asia Pacific region rose 9%.
Operating profit at Kellogg in the second quarter rose 2% to $530 million, up from $518 million in the same period a year ago.
Looking forward, Kellogg raised its full-year earnings to be in a range of $2.95 to $3 per share, up from $2.92 to $2.97 per share. The company noted that incremental commodity, energy, fuel and benefits expenses are expected to total 90c per share, up from the previous expectation of 80c per share.
"While commodities and the economic outlook remain volatile, our business model and strategy give us continued confidence that we will achieve our long-term goals," Mr. Mackay said.
In addition to its financials, Kellogg Co. announced that its board of directors has authorized an additional $500 million share repurchase program to be carried out within the next 12 months. The move comes on top of the company’s already completed $650 million authorization for 2008.