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Author: Alan LittleDate: 2021-11-05

Kellogg (K) -1.56% as near-term cost warnings overshadow Q3 beats

Kellogg (K) traded down on Thursday after the food production company, known for its cereals, posted Q3 beats but said that labour costs would weigh on its Q4 performance.

Cereal maker Kellogg Co (K) slipped 1.56% during Thursday’s trading as warnings about near-term labour costs and supply chain problems overshadowed its Q3 beats.

For the three months to 31st September, Kellogg’s earnings leapt 19.8% from a year ago to $1.09 per share, which was easily enough to top the $0.93 Wall Street tally.

Group revenues also grew 5.6% during the same period to surpass $3.622bn, again up on the $3.5bn forecasts.

CEO Steve Cahillane said that Kellogg had prospered despite being forced to navigate several notable headwinds, including rising inflation, during the quarter.

He noted: “That we could deliver strong third-quarter results and reaffirm our full-year earnings guidance in this environment is a testament to our strategy, our portfolio, and our people.”

The current quarter could be even more troublesome for Kellogg though as ongoing disagreements with employees could lead to higher labour costs.

Still, the Michigan-based company is expecting to deliver full-year earnings within its previously stated guidance, albeit at the lower end.

Kellogg also sees its organic sales climbing by 2% to 3% in Q4.

Cahillane believes that Kellogg’s popular snack and frozen food brands will help to sustain business momentum in the coming months ahead of further financial growth in the long term.

Investors were not entirely won over by the latest showing as after brief gains in the morning, Kellogg shares had dipped 1.56% to $62.72 by midday in New York.

Elsewhere, Moderna (MRNA) cratered 18.37% to $282.36 on the Nasdaq after it missed Q3 earnings per share forecasts by 135 cents and revenue expectations by more than $1.2bn amid “complex” supply chain issues.

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