The 10-second takeaway
For the quarter ended June 30 (Q2), Kellogg beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased slightly and GAAP earnings per share shrank.
Margins dropped across the board.
Kellogg notched revenue of $3.47 billion. The 17 analysts polled by S&P Capital IQ wanted to see net sales of $3.38 billion on the same basis. GAAP reported sales were 2.6% higher than the prior-year quarter's $3.39 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.93. The 18 earnings estimates compiled by S&P Capital IQ averaged $0.84 per share. GAAP EPS of $0.84 for Q2 were 11% lower than the prior-year quarter's $0.94 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 40.7%, 190 basis points worse than the prior-year quarter. Operating margin was 14.0%, 220 basis points worse than the prior-year quarter. Net margin was 8.7%, 140 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $3.72 billion. On the bottom line, the average EPS estimate is $0.81.
Next year's average estimate for revenue is $14.08 billion. The average EPS estimate is $3.35.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 884 members rating the stock outperform and 84 members rating it underperform. Among 290 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 273 give Kellogg a green thumbs-up, and 17 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Kellogg is hold, with an average price target of $53.09.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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