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.
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