Kellogg Co. announced first-quarter results for earnings per share that were greater than the company's expectations; results for operating profit were in-line with expectations. First quarter 2014 reported net sales decreased by 3.1 percent to $3.7 billion. Internal net sales, which exclude the effects of foreign currency translation, acquisitions, dispositions and integration costs, decreased by 2.4 percent over the same period. First quarter 2014 operating profit was $614 million, a reported increase of 22.1 percent; this increase was driven primarily by the impact that asset returns and changes in interest rates had on pension plans.
Reported earnings for the first quarter 2014 were $406 million, or $1.12 per diluted share, an increase of 32 percent from the $0.85 per diluted share reported in the first quarter of last year. This quarter's reported earnings per share included an impact from mark-to-market of $0.22 per share, partially offset by $0.10 per share of costs associated with Project K and approximately $0.01 per share of integration costs related to the acquisition of Pringles. Excluding these items, comparable first quarter 2014 earnings were $1.01 per share, greater than the company's expectations as the result of the impact of a $0.03 per share benefit in other income and expense.
In North America, net sales posted by Kellogg North America were $2.5 billion in the first quarter, a reported decrease of 2.9 percent; internal net sales decreased by 2.4 percent. The U.S. morning foods segment posted an internal net sales decline of 5.5 percent. Internal net sales in the U.S. snacks segment increased by 0.3 percent. The U.S. specialty channels segment posted a 1.7 percent internal net sales decline in the quarter and the North America other segment, which is comprised of the U.S. frozen foods and Canadian businesses, posted a 2.1 percent decrease in internal net sales. Reported operating profit in North America decreased by 9.4 percent; internal operating profit declined by 6.1 percent, largely as the result of lower sales and the timing of costs of goods sold. Full report.