(By Balachander) Kellogg Co. (NYSE:K), the ready-to-eat cereal maker, maintained its earnings forecast for the year ending December 31.
The Battle Creek, Michigan-based company expects good performance from the Pringles business in the third quarter and changes in the estimates for certain non-operating items offset substantially all of the costs related to the recent, limited recall of certain packages of Mini-Wheats cereal.
Kellogg expects costs of between $20 million and $30 million to be recognized in the three months ended in September.
The company expects earnings per share in the range of $3.18 to $3.30 for 2012, while Wall Street analyst expect $3.29, with estimates ranging from $3.21 to $3.36.
For the second quarter ended June 30, Kellogg earned $301 million, or $0.84 per share, down from $343 million, or $0.94 per share, in the comparable period of last year. Sales rose 2.7 percent to $3.48 billion. Cost of goods sold increased 6 percent.
Its second-quarter 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.
In May, Kellogg completed purchase of Pringles potato chips business from Procter & Gamble Co. (NYSE:PG) in a $2.695 billion all-cash transaction. The Pringles acquisition makes Kellogg the world's second-largest savory snacks company with $1.5 billion in sales across more than 140 countries.
The company reaffirmed its guidance for full-year internal net sales growth of between 2 percent and 3 percent.
The stock, which has been trading in a 52-week range of $46.33 to $55.30, shed 0.25 percent to trade at $51.47 on Wednesday.