Earnings Preview: Kellogg Co.

Kellogg Co. (K) is expected to report Q3 earnings before market open Wednesday, October 29, with a conference call scheduled for 10:30 am.

Guidance

Analysts are looking for a profit of 80c on revenue of $3.29B. The consensus is 76c to 84c for EPS, and revenue of $3.22B to $3.33B, according to First Call. In July Kellogg raised its FY08 EPS guidance to $2.95 to $3.00 vs. First Call consensus of $3.00.

Analyst Views

D.A. Davidson analyst Timothy Ramey believes the company is likely to benefit as commodity costs for ingredients such as sweeteners, grains and packaging come down and is in a good position in this "volatile market". Ramey said that while the company could be hurt by the weakening euro -- Europe has accounted for nearly 20% of Kellogg's operating profit this year -- he expects to see upside EPS surprises over the next few quarters and does not see any of the company's brands likely to give back pricing in a lower-cost environment.

A Gabelli analyst agrees, explaining that management continues to executive on its market innovation strategy and its brand is strongly positioned across regions and categories. The analyst expects Kellogg to benefit from higher sales as consumers shift purchase to at-home eating.