Kellogg’s US breakfast business shrinks again

Excluding certain costs, second-quarter earnings were 92 cents a share, in-line with the FactSet consensus of 92 cents.

“We were pleased that results in the second quarter were as we expected, ” Chairman and Chief Executive John Bryant said in a news release Tuesday.

BATTLE CREEK, Mich. (AP) – Kellogg says its U.S. breakfast foods division saw another decline in quarterly sales but that trends in the cereal category were improving.

Cereal sales in the U.S., United Kingdom and other developed markets-which make up a quarter of Kellogg’s total sales-have dropped in recent years as people switch to more-portable or lower-carbohydrate options like granola bars and yogurt.

The company said its net sales in North America were down 1.8 percent when adjusted for currency fluctuations.

The company reaffirmed previous guidance for currency-neutral comparable net sales, operating profit, and earnings per share in 2015. The company reported sales of $3.50 billion, above the FactSet consensus of $3.47 billion. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 91 cents per share.

Kellogg shares have increased 1 percent since the beginning of the year, while the Standard & Poor’s 500 index has climbed roughly 2 percent.

The dollar had risen 19 percent against a basket of major currencies in the 12 months to June.

Over the weekend, Kellogg reached an agreement with the Bakery, Confectionery, Tobacco and Grain Millers union to keep the company’s four cereal plants open for the next five years, which involves about 1,300 jobs.

Kellogg has already unveiled in late 2013 its largest-ever cost-cutting plan, a multiyear initiative dubbed Project K that includes closing underused factories and reducing its workforce.

Changing consumer preferences for healthier foods are driving down sales for some of Kellogg’s major product lines, particularly breakfast foods and cereals.

Last month, the company declared a 50-cent dividend payable to shareholders of record as of September 1.