Kellogg Co., the world’s largest cereal company, raised its annual earnings forecast after its cost-cutting program helped make up for a slumping breakfast business.
Profit will be $4.11 to $4.18 a share this year when removing the effects of currency, the Battle Creek, Michigan-based company said in a statement Thursday. It had previously projected $4 to $4.07 a share.
Kellogg’s move to embrace zero-based budgeting -- an increasingly popular form of cost cutting in the food industry -- is boosting its margins. The company also benefited from growth of Pringles potato chips and a less-dire-than-expected business in Venezuela, which has suffered from runaway inflation.
Last quarter, profit was 91 cents a share, excluding some items, which matched analysts’ estimates. But sales fell more than 6 percent to about $3.26 billion in the quarter, worse than the average projection of $3.36 billion.
Kellogg is still trying to turn around its struggling morning-foods division, which has been hurt by a prolonged slump in U.S. cereal sales. The company, known for brands like Special K and Froot Loops, has said the category can return to growth this year as younger consumers embrace the breakfast staple as a snack.
The stock rose 1.1 percent in early trading after the results were posted. It had already gained 12 percent this year through Wednesday.
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