Kellogg's Earnings Rise, As Expected

Kellogg Co. (K), the nation's largest breakfast-cereal maker, said Wednesday that second-quarter earnings rose 9 percent, in line with analysts' expectations, and the company raised profit guidance for the full year.

Net income rose to $259 million, or 62 cents per share, from $237.4 million, or 57 cents per share, a year ago. Sales grew 8 percent to $2.59 billion from $2.39 billion last year.

The results beat revenue estimates of $2.51 billion, according to a Thomson Financial survey.

"Business momentum continued in the second quarter and we again capitalized on this strength through increased investment in future growth," Jim Jenness (search), Kellogg's chairman and chief executive, said in a statement.

Kellogg raised its guidance for full-year earnings to a range of $2.30 to $2.33 per share. The outlook includes larger-than-expected investments in brand building, and an estimate for upfront costs and write-offs of about 15 cents per share from expected bakery closings and cost-reduction initiatives. The company said in March it was considering shutting down its Keebler (search) bakeries in Macon, Ga., and Des Plaines, Ill.

"Our performance through the first half of the year has been very strong," Jenness said. "It is this performance that allows us the flexibility to increase our guidance while investing aggressively in our businesses around the world."

Analysts are currently looking for operating profit of $2.37 per share for the full year.

Shares of Kellogg rose 44 cents, or 1 percent, to $44.90 on the New York Stock Exchange.