Companies across the food sphere report earnings this time of year, so Food Dive breaks down the latest earnings news all in one place.
Kellogg earnings plunge 44%
Kellogg Co. saw its earnings take a huge 44% hit, dropping to $227 million, or $0.64 per share, down from $406 million, or $1.12 per share, in the same quarter last year.
Revenue also fell 5% to $3.6 billion, in large part due to the strength of the U.S. dollar, something many companies have said has affected these reports..
Kellogg has released new products to combat changing consumer preferences for healthier foods, including Special K with added protein and another gluten-free variety. Comparable sales for the company's U.S. morning-foods division dropped 2.9% from last year's first quarter.
Kellogg's CEO John Bryant said its Q1 results topped its expectations and the company is still on target for its 2015 guidance.
Project K was one driver for the decrease in Kellogg's earnings, as the costs associated with it negatively impacted the company by about $0.13 per share. Project K is a cost-cutting and efficiency-promoting initiative that has already led to the closures of several plants, including one in Clearfield, UT, just last week. The goal is to ultimately close factories and trim the workforce by 7% by the end of 2017, but it seems for now that the project is costing the company in the near term as it waits for efficiency benefits to kick in.
ADM earnings rise, sales dip
Archer Daniels Midland Co. reported a 12% increase in adjusted segment operating profit in Q1, and earnings per share rose to $0.77 per share over $0.55 per share in last year's first quarter.
Net sales for the quarter fell 15.4% year over year, falling below analysts' estimates, due primarily to lower industry ethanol margins, which limited earnings in corn, as well as the strong dollar, which hindered U.S. grain exports.
This was offset by the company's performances in oilseeds, agricultural services, and its new specialty ingredients business.
According to ADM, oilseeds delivered strong performances in each region by capitalizing on favorable marketing conditions. Agricultural services saw higher merchandised volumes from its recently created global trade desk platform. On ADM's last segment of promise for this quarter, ADM CEO Juan Luciano said, "Our new WILD Flavors and Specialty Ingredients business got off to a great start toward achieving the cost and revenue synergies we identified last year."
ADM also strategically acquired Belgian oil bottler AOR N.V., which will enable the company to "reach a wider customer base and creating a new output for our European crushing assets," said Luciano. ADM also recently expanded its soy crushing efforts in two other plants, one in the U.S. and one in Canada.
These moves are all in line with the plan ADM outlined for its investors at the end of last year. Another recent announcement was ADM's new no-deforestation policy for its soy and palm oil suppliers, a step toward better sustainability.
Also Tuesday, ADM announced feed expansion plans for its Glencoe facility, expected completion in Q1 2016.