Kellogg Company’s (K – Free Report) fourth-quarter 2017 adjusted earnings came in line with the Zacks Consensus Estimate while revenues surpassed the same. Cost-saving initiatives as well as higher contribution from the acquisitions of protein bar maker RXBAR and Brazilian food group Parati helped the company offset the industry-wide soft consumption trends for packaged food items.

Earnings In Line

Fourth-quarter comparable earnings of 96 cents per share came in line with the Zacks Consensus Estimate. The bottom line increased 5.5% year over year banking on higher operating profit and lower restructuring charges.

Revenues Beat

Kellogg reported revenues of $3.21 billion, increasing 3.6% year over year. The upside can be primarily attributed to the December 2016 acquisition of Parati in Brazil and October 2017 takeover of RXBAR along with favorable currency translation. The top line outpaced the consensus mark of $3.11 billion by 3.2%.

Currency and acquisitions had a 2% and 2.9% positive impact on revenues in the quarter. However, Venezuela deconsolidation had a 0.3% negative impact on the top line. Accordingly, organic revenues (excluding the impact of acquisitions, dispositions and foreign exchange) were down 1.5% compared with a 1.4% decline in the previous quarter. Except Europe and Asia Pacific, organic sales decreased across all other regions.

Volumes remained unchanged from the year ago period, a shade better than the 1.6% decrease in the preceding quarter. Meanwhile, price/mix had a 1.5% adverse impact on sales against the 0.2% positive contribution last quarter.

Kellogg Company Price, Consensus and EPS Surprise

Kellogg Company Price, Consensus and EPS Surprise | Kellogg Company Quote

Profits Rise

Kellogg’s operating margin (currency-neutral comparable growth) was 16.8%, reflecting an improvement of 90 basis points (bps) year over year. The uptick can be attributed to the benefit from strong productivity savings related to the Project K restructuring program, particularly this year’s exit from its U.S. Snacks segment’s Direct Store Delivery (DSD) system.