NEW YORK A boost from Pringles and strong international results helped Kellogg's (K) fourth-quarter earnings surpass expectations.
Kellogg's, known for breakfast food such as Froot Loops, Eggo waffles and Pop Tarts, has been seeking to improve its results by investing in its supply chain after several product recalls and by expanding its salty snacks business.
It acquired Pringles from Procter & Gamble (PG) in February 2012. The brand provided a boost in the fourth quarter, with Pringles revenue up 5 percent in the U.S. and 1 percent in Europe.
The company also changed its accounting method for pensions, and related one-time adjustments led to a loss of $32 million, or 9 cents per share, for the period. That compares with a loss of $195 million, or 54 cents per share, for the prior year's revised results.
Not including one-time items related to its pension adjustments and the Pringles acquisition, the company said underlying earnings were 67 cents per share, a penny above what analysts expected, according to FactSet.
Revenue rose 18 percent to $3.56 billion, from $3.02 billion in the prior year. Analysts expected $3.44 billion. Excluding foreign currency translation, revenue rose 5 percent.
In North America, the company's net sales rose 12 percent in the quarter, or 5.5 percent for existing products, with the breakfast foods and Kashi segment rising by 6 percent.
International sales rose 31 percent in the fourth quarter, boosted by results in Asia and Latin America. Internal sales, which exclude the impact of acquisitions and foreign currency translations, rose 5 percent. The European business also showed improvement, with internal sales up 2.7 percent in the quarter.
For the year, net income rose 11 percent to $961 million, or $2.67 per share. That compares with $866 million, or $2.38, in the prior year. Revenue rose nearly 8 percent to $14.2 billion from $13.2 billion in 2011.
The company, based in Battle Creek, Mich., stood by its outlook for 2013, with sales expected to increase by about 7 percent. Full-year earnings per share are expected to grow between 5 percent and 7 percent.