NEW YORK (TheStreet) -- Kellogg Co. (K - Get Report) shares closed down -2.2% to $65.51 today following the release of the company's first quarter earnings results.
The company reported year over year first quarter sales fell -3.1% to $3.7 billion, missing analysts estimates of $3.8 billion.
The cereal and convenience food manufacturer posted net earnings of $1.01 per diluted share, beating analysts estimates by 4 cents.
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TheStreet Ratings team rates KELLOGG CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate KELLOGG CO (K) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 2656.3% when compared to the same quarter one year prior, rising from -$32.00 million to $818.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food Products industry and the overall market, KELLOGG CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for KELLOGG CO is rather high; currently it is at 61.53%. It has increased significantly from the same period last year. Along with this, the net profit margin of 23.36% significantly outperformed against the industry average.
- Net operating cash flow has slightly increased to $418.00 million or 9.13% when compared to the same quarter last year. Despite an increase in cash flow, KELLOGG CO's cash flow growth rate is still lower than the industry average growth rate of 47.64%.
- KELLOGG CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, KELLOGG CO increased its bottom line by earning $4.95 versus $2.68 in the prior year. For the next year, the market is expecting a contraction of 19.6% in earnings ($3.98 versus $4.95).
- You can view the full analysis from the report here: K Ratings Report