BATTLE CREEK (AP) – Kellogg Co.’s fourth-quarter net income climbed 7 percent as the world’s biggest cereal maker raised prices.
Kellogg said it raised prices to offset higher ingredient costs. Kellogg, which makes Frosted Flakes, Pop Tarts, Eggo waffles and other foods, also affirmed that it expects its 2011 earnings to fall below Wall Street expectations.READ MORE: Michigan Matters: Theaters & Politics
The company based in Battle Creek earned $189 million, or 51 cents per share, during the fourth quarter. This compares with $176 million, or 46 cents per share, a year ago.
Revenue for the quarter that ended Jan. 1 dipped 1 percent to $2.86 billion from $2.9 billion, but still topped the average forecast of analysts surveyed by FactSet for revenue of $2.85 billion.
For the year, Kellogg’s net income rose 3 percent to $1.25 billion, or $3.30 per share, from $1.21 billion, or $3.16 per share, in the prior year. Annual revenue dropped 1 percent to $12.4 billion from $12.58 billion. Kellogg still expects 2011 earnings of $3.33 to $3.40 per share. Analysts predict $3.47 per share for the year.READ MORE: CDC: New Listeria Outbreak Tied To 23 Illnesses, 1 Death
The food product company has said that 2010 was one of its most difficult years as it struggled with lower sales, intense competition and significant food recalls.
Many businesses are deciding to boost prices to contend with higher costs. On Wednesday appliance maker Whirlpool Corp. and Swedish rival Electrolux AB both said they were increasing prices because of higher raw material costs.
Consumer product makers Colgate-Palmolive Co. and Procter & Gamble Co. said last week that commodity costs are rising more than they expected, and they are likely to increase prices on some of their products.MORE NEWS: Red Wings Hire Lightning Assistant Derek Lalonde As Coach
(Copyright 2011 by The Associated Press. All Rights Reserved.)