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Sale Of Keebler Snack Business Puts A Dent In Kellogg’s 4th Quarter And 2020 Outlook

February 6, 2020: 12:00 AM EST
Shares of packaged-food company Kellogg have rebounded from a pummelling earlier this month when investors expressed disappointment with the company’s latest financial results and the 2020 outlook. Fourth-quarter earnings were $0.42 a share, compared with a loss of $0.24 a year earlier. But for the full year, Kellogg earned $2.80 a share, down from $3.83 a share, blaiming it on one-time charges and the impact of the 2019 $1.3 billion sale of its Keebler snack business. In addition, the company’s 2020 outlook failed to live up to analysts' expectations, sending shares lower. As the company pivots away from its iconic cereal business, whose sales have been soft especially in developed markets such as the U.S., it has been putting more emphasis on snacks and emerging markets. The company’s guidance for the current fiscal year includes an organic net sales increase of 1-2 percent versus last year, below the 2.1 percent Wells Fargo Securities had expected. Many were expecting more than two percent. Last year, organic net sales increased 1.9 percent.[Image Credit: © KELLOGG Company]
Lawrence C. Strauss, "Kellogg Is Tumbling Because Its 2020 Outlook Is Soft", Barron’s, February 06, 2020, © Dow Jones & Company, Inc.
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