BATTLE CREEK, Mich., July 31, 2014 /PRNewswire/ -- Kellogg Company (NYSE: K) today announced second-quarter results for earnings per share that were broadly in-line with the company's expectations. Second-quarter 2014 reported net sales decreased by 0.8 percent to $3.7 billion. Internal net sales,* which exclude the effects of foreign currency translation, acquisitions, dispositions, and integration costs, decreased by 1.5 percent over the same period. Second-quarter 2014 operating profit was $467 million, a reported decrease of 18.1 percent; this decrease was driven primarily by costs associated with Project K, the company's four-year efficiency and effectiveness program, and lower sales. Underlying internal operating profit,* which excludes the effects of foreign currency translation, acquisitions, dispositions, mark-to-market accounting, integration costs, and costs associated with Project K, decreased by 7.2 percent. The decline in underlying internal operating profit was largely the result of lower sales, and investment in brand-building activities.
Net sales posted by Kellogg North America were $2.4 billion in the second quarter, a reported decrease of 3.7 percent; internal net sales decreased by 3.4 percent. The U.S. Morning Foods segment posted an internal net sales decline of 4.9 percent. Internal net sales in the U.S. Snacks segment decreased by 2.7 percent. The U.S. Specialty Channels segment posted a 1.4 percent internal net sales increase in the quarter and the North America Other segment, which is comprised of the U.S. Frozen Foods and Canadian businesses, posted a 4.9 percent decrease in internal net sales. Reported operating profit in North America decreased by 11.9 percent; underlying internal operating profit declined by 8.7 percent, largely as the result of lower sales and increased investment in brand building. Full report.