BATTLE CREEK — Kellogg Company Thursday announced second quarter 2012 reported net sales of $3.5 billion, an increase of 2.6 percent from the second quarter of 2011. Internal net sales increased by 2.3 percent over the same period.
Operating profit was $485 million in the quarter, a reported decrease of 10.7 percent; internal operating profit declined by 5 percent, as expected. Higher commodity costs, the timing of investment in Supply Chain, and anticipated weakness in European results all had an impact on operating profit. Internal results exclude the effects of foreign currency translation, one month of results from the recently acquired Pringles business, transaction and integration costs, and divestitures.
Reported second quarter 2012 earnings were $301 million, or $0.84 per diluted share, a decrease of 10.6 percent from the earnings of $0.94 per diluted share reported in the second quarter of 2011. This quarter’s earnings per share included $0.07 of transaction and integration costs and a $0.02, one-time, below-the-line benefit, both associated with the acquisition of the Pringles business.
The below-the-line benefit was the result of a lower tax rate and a gain from foreign exchange; this benefit was partially offset by the impact of interest-rate swaps also related to the acquisition of Pringles.
“We are pleased that our top-line performance improved in the second quarter. This year, we have taken strategic actions that have also made a difference in the near-term,” said John Bryant, Kellogg Company’s president and chief executive officer. “Last year we outlined a plan that focused the company on driving our two core growth platforms: cereal and snacks. The acquisition of the Pringles business takes us a long way toward achieving our goals and provides us with significant potential for future growth.”