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(Recasts, adds sales, forecast)
CHICAGO, July 31 (Reuters) - Kellogg Co (K.N) posted higher quarterly profit on Thursday, helped by prices increases, and raised its full-year forecast even as it said costs for wheat and other commodities will be higher than expected.
The company also said its board of directors has approved the repurchase of $500 million worth of its shares and said a previous plan to repurchase $650 million worth of its shares was already completed.
The largest U.S. cereal maker said profit rose to $312 million, or 82 cents a share, in the second quarter from $301 million, or 75 cents a share, a year earlier.
Like most food companies, Kellogg has raised prices and taken other steps to try to offset commodity costs. The company has also increased advertising and focused on developing new products to boost sales.
Sales rose 11 percent, helped by the weak dollar, which boosts the dollar value of sales made outside the United States.
Internal net sales, which excludes the impact of currency fluctuations and acquisitions, rose 6 percent. North American cereal sales rose 5 percent on that basis.
Kellogg also said it now expects 2008 earnings to be $2.95 to $3 a share, up from its previous forecast of $2.29 to $2.97 a share. The forecast increase comes even as the company said it now expects costs for energy, commodities, fuel and benefits to cost 90 cents a share extra when compared with last year, up from its previous forecast of 80 cents.
Kellogg shares rose to $54.95 in premarket electronic trading from Wednesday's New York Stock Exchange close of $54.15. (Reporting by Brad Dorfman, editing by Dave Zimmerman)