Shares of Kellanova K experienced a notable rise of 2.1% in premarket trading on Wednesday, reaching a five-week high. The snacks and frozen foods company, formerly known as Kellogg, reported better-than-expected profits for the third quarter. However, they fell short on revenue and offered a pessimistic outlook.
Profitability and Earnings
Net income for the company declined to $269 million, or 78 cents per share, compared to $310 million, or 90 cents per share, in the same period last year. Kellanova K exceeded projections with adjusted earnings per share of $1.03, surpassing the FactSet consensus of 89 cents.
Revenue and Sales
While sales decreased slightly by 0.2% to $3.94 billion from $3.95 billion, the FactSet consensus anticipated an increase to $4.04 billion. This discrepancy can be attributed to the adverse impact of higher prices on demand. The company observed an 11.3% rise in overall pricing and mix, but experienced a decline in volume by 7.4%. Within North America, the volume decline of 10.25% outpaced the increase in price/mix of 9.9%.
Fourth Quarter Expectations
Looking ahead to the fourth quarter, Kellanova K anticipates adjusted earnings per share ranging from 73 to 76 cents and estimates revenue around $3.1 billion. These projected figures fall below the current FactSet consensus for EPS of 79 cents and revenue of $3.16 billion.
Stock Performance
Over the past three months, the stock has declined by 14.5%, while the S&P 500 has also faced a 2.7% decrease.
