Kellogg Q4 and hard times warning - financial results, 2000 - Brief Article - Statistical Data Included

Eurofood, Feb 1, 2001

US-based cereal giant Kellogg has warned that hard times could possibly be ahead, as the group strives to integrate Keebler which it acquired from Flowers Industries (see Eurofood, 9 November 2000, p2). Kellogg CEO Carlos Gutierrez has forecast that absorbing Keebler could take as long as the next three-quarters. "This will create some near-term pain; but it will make us a stronger company," Gutierrez commented. Gutierrez has forecast an earnings drop, down to around 30 cents a share representing a 25% decrease. Gutierrez wants to make Kellogg less dependant on its cereals, particularly given the stagnated nature of the US cereal market. The acquisition of Keebler, which should be closed by March, is the first step in diversifying Kellogg's activities. Gutierrez also wants to focus more of the firm's resources in the US, concentrating on its core brands.

News of the `hard times' came along with Kellogg reporting its fourth quarter results, which saw a 4.4% rise. Q4 net earnings were recorded at US$142.7m ([euro]150.4m) compared to US$136.7m in Q4 1999. Total earnings at the cereal giant for 2000 were registered at US$651.9m up from the US$606.2m generated in 1999. Net sales for the fourth quarter actually dropped by 1.9% from US$1.59bn to US$1.56, however, excluding foreign currency exchange, sales for the quarter were the same. Net sales for 2000 were US$6.95bn, a slight decline of 0.4% from US$6.98bn in 1999, however, excluding the impact of foreign currency, net sales would be up 1.1%.