Kellogg to cut 7 percent of workforce by 2017, lowers forecast

Kellogg Co (NYS:K), the world's largest maker of breakfast cereals, said it would cut about 7 percent of its workforce by 2017 and also trim production capacity, after reporting another quarterly decline in sales in its cereals business. Shares of the maker of corn flakes, Keebler cookies, Froot Loops cereals and Eggo waffles rose as much as 4 percent.

The company's cereals business, which includes Special K corn flakes and Rice Krispies, has been battling stiff competition from General Mills Inc (NYS:GIS) and private-label cereal brands. Increasing popularity of yoghurt, frozen egg sandwiches and other breakfast items has also hit the business.

Sales at Kellogg's U.S. morning foods business, which includes cereals, fell 2.2 percent in the third quarter ended September 28. The job cuts are a part of a four-year cost-cutting program, called Project K, that the company launched on Monday. The company said it would create regional hubs that will put resources closer to its plants. Read more.

Kellogg Co. to cut worldwide workforce by 7 percent over four years; Project K to save $475 million by 2018

Kellogg Co. announced a four-year efficiency program Monday that it says will result in a 7 percent reduction in the company's global workforce by the end of 2017. Called Project K, the program is being described as an efficiency and effectiveness program and will mean changes to the giant cereal maker's design and infrastructure that is expected to annually save Kellogg $425 million to $475 million by 2018.

The effort will include "an optimization of supply-chain infrastructure," according to the company that include the consolidation of facilities and the elimination of excess capacity, and it strive for increased productivity in global business services, which will mean the consolidation of "common processes or business services across multiple regions and functions." The company did not announce what facilities or operations would be effected or how consolidating may impact its operations in Battle Creek. Read more.

Kellogg: Healthy Balance Between Snacks And Cereal

Kellogg (K) hasn't been participating in the recent market euphoria, for the simple reason that it's a cash cow/bond substitute and interest rates seem likely to rise further. At current prices in the $61 area, looking out five years, a combination of dividends and capital appreciation totaling 9% annually comes into view.

At Kellogg Company, we are driven to enrich and delight the world through foods and brands that matter. With 2012 sales of $14.2 billion, Kellogg is the world's leading cereal company; second largest producer of cookies and crackers; a leading producer of savory snacks; and a leading North American frozen foods company. Every day, our well-loved brands nourish families so they can flourish and thrive. Read more

Break your Bowl of Kellogg’s

The Kellogg Company (K) has recently experienced falling demand for its cereal and snack products in the US, which is a significant hurdle as these products constitute a major portion of the company’s revenues. While international expansion is still a key driver for Kellogg’s growth, core product categories (cereal and snacks) have been suffering and the lack of funds could hit the company’s international expansion plans. Bidness Etc thinks Kellogg’s stock is a sell.

 

Kellogg generated 33% of its revenues from international sales in FY12 compared to 32% in FY10. The revenue share from international markets will continue to increase due to growth in these markets and Kellogg’s acquisition of Pringles. Read more.

The Kellogg s Lesson Cut Your Costs, Before They’re Cut For You

Activist investors are on the prowl for corporate cash, and a proactive move by Kellogg Co. may signal to peers that they too should get their defensive game in order.Kellogg announced Monday a plan to strip costs out of its supply chain, slash its global workforce by 7% over four years and then reinvest the savings into building up some of its struggling products, like cereal.

The maker of Frosted Flakes and Pop-Tarts pastries is being proactive, analysts say, fending off activist investors by taking advantage of cost savings before someone sees the opportunity and takes it.Activist investor Nelson Peltz has been pressuring snack maker Mondelez International Inc. to be leaner. Read more.

Kellogg – A Cereal Fall in Revenues

The Kellogg Company’s (K) stock price rose 2% after the company announced a planned reduction of 7% in its global workforce by 2017. This announcement was made in its 3QFY13 earnings release on November 5 which beat consensus estimates. However, the company’s growth prospects remain bleak. Its sales in North America are declining as demand for its core product, cereals, is falling and negatively affecting the company’s US Morning Foods and US Snacks segments. Furthermore, its international expansion plans may be in trouble due to a possible shortage of funding, despite the company’s cost-cutting program, Project K.

Kellogg’s reported earnings per share (EPS) of $0.90, besting analyst estimates by 4.7%. Sales revenues however, barely matched estimates, and internal revenue growth was just 0.5%. Following the earnings report and the job-cut announcement, the share price initially crept up 2% but then fell back to unchanged level. Read more.