Kellogg

(K) - Get Report

reported a first-quarter rise in earnings, thanks to strong sales in its cereal and snack businesses.

The cereal maker earned $163.9 million, or 40 cents a share, compared with $152.6 million, or 37 cents a share. Analysts were expecting 39 cents a share.

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Sales rose 4.2% to $2.15 billion. Foreign currency translation contributed 2.3 percentage points to the sales growth, the company said. U.S. cereal sales increased 4% because of promotions and new products.

"While we faced some unusually large cost increases in the first quarter, we made good progress in mitigating those pressures, and we kept overhead down," said Carlos Gutierrez, Kellogg's chairman and chief executive.

Kellogg said it expects a second-quarter double-digit EPS improvement. Analysts expect 46 cents a share. The company earned 42 cents a share in the prior-year second quarter. Looking to 2003 earnings, the company reiterated its estimate of $1.86 to $1.90 a share, in line with analysts' expectation of $1.88 a share, on average.

Shares of the Battle Creek, Mich.-based company were up 0.9% at $32.03 in afternoon trading.