NEW YORK—Kellogg Co. reports earnings for the fiscal first quarter on Wednesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Kellogg, maker of Rice Krispies cereal, Eggo waffles and Keebler cookies, has been battling higher commodity costs. Like all food makers, Kellogg has had to offset the sharply higher costs for wheat, oats, corn and other commodities by raising retail prices. Kellogg raised prices across many of its brands in January and said it is pursuing a number of productivity initiatives.
Kellogg also has been looking at expanding its business overseas. In January, the company bought Russian biscuit and cereal maker United Bakers Group. The deal included the Russian company's six manufacturing plants and its sales and distribution network.
BY THE NUMBERS: Kellogg has not offered any guidance for the quarter. Analysts polled by Thomson Financial expect profit of 76 cents per share on revenue of $3.18 billion.
ANALYST TAKE: Deutsche Bank North America analyst Eric Katzman said in an analyst note that he expects investors to pay close attention to the company's volumes in the quarter to determine whether consumers have been willing to keep buying products despite the higher prices.
Katzman said he believes consumers will swallow the higher prices and that cost saving measures and productivity initiatives will help protect profit.
WHAT'S AHEAD: Kellogg has said it is on track to meet its full-year guidance of between $2.92 and $2.97 per share in profit despite the higher food ingredient costs. Investors will be watching to see how well the company copes with the costs.
Wall Street will also look for any signs of whether consumers remain willing to pay higher retail prices for Kellogg's products.
STOCK PERFORMANCE: Shares fell less than 1 percent in the quarter and dropped 5 percent in the past 52 weeks. They closed Monday at $51.17.
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