* First-quarter earnings $1.01/shr vs est $0.97/shr
* Net sales fall 3.1 pct to $3.74 bln vs est $3.81 bln
* Sales at U.S. morning foods business decline 5.5 pct
(Adds details, background, analysts' estimates, shares)
May 1 Kellogg Co reported a
bigger-than-expected fall in quarterly revenue as competition
from private-label brands and alternative breakfast items ate
into cereal sales in the United States.
The world's No. 1 maker of breakfast cereals has been
struggling with stiff competition from General Mills Inc
and cheaper private-label brands, as well as the rising
popularity of other breakfast items, such as frozen egg
sandwiches and yoghurt.
Sales at Kellogg's U.S. morning foods business, which
includes cereals such as Corn Flakes, Froot Loops and Special K,
fell 5.5 percent in the first quarter ended March 29, its fourth
straight quarterly decline.
The company has invested in packaging, shopper programs and
mobile and in-store ads to stem the decline in sales.
Kellogg launched in November a cost-cutting program, dubbed
"Project K," under which it planned to cut about 7 percent of
its workforce and create regional hubs that would put resources
closer to its plants.
The cost cutting helped Kellogg top first-quarter profit
estimates. Excluding items, the company earned $1.01 per share,
compared with the average analyst estimate of 97 cents.
Chief Executive John Bryant said in a statement on Thursday
that the company expects top-line performance to improve over
time and reiterated its full-year forecast.
Net sales at Kellogg, also known for its Pringles chips and
Keebler cookies, fell to $3.74 billion, below the average
estimate of $3.81 billion.
The company's net income jumped 32 percent to $406 million,
or $1.12 per share.
Kellogg's shares have risen 9.4 percent this year to
Wednesday's close of $66.83 on the New York Stock Exchange.
(Reporting by Maria Ajit Thomas in Bangalore; Editing by