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Net income turns soggy for Kellogg’s

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PORTLAND, Ore. » A major cereal recall and soft sales dragged Kellogg Co.’s second-quarter net income down 15 percent and led the food maker to cut its full-year outlook yesterday.

Kellogg, which makes products such as Pop-Tarts, Frosted Flakes and Cheez-It crackers, said the results were disappointing.

The company reported that it earned $302 million, or 79 cents a share for the quarter, down from $354 million, or 92 cents a share in the prior year.

Revenue fell 5 percent to $3.06 billion.

Kellogg recalled 28 million boxes of Apple Jacks, Corn Pops, Froot Loops and Honey Smacks cereal last month after about 20 people complained that the boxes had an unusual smell and flavor.

Kellogg’s later identified elevated levels of chemicals in the liner as the cause and said yesterday that it was a supplier issue.

The recall cut into the company’s revenue and cut profit by 10 cents per share for the quarter. The company expects it will continue to take its toll at an estimated 12 cents per share of profit for the full year.

Kellogg also saw its cereal revenue hurt as the company limited the number of products it sells.

 

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