Kellogg sees annual profit above expectations as price hikes help

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(Reuters) -Kellogg Co forecast full-year profit above expectations after posting upbeat quarterly earnings on Thursday as higher prices for its snacks and cereals helped cushion blows dealt by soaring input costs and supply chain issues.

Increasing costs for freight and ingredients such as wheat, corn and edible oils due to global supply chain snarls have significantly hurt packaged food companies, leaving them with little choice but to hike prices.

The company said its outlook accounted for more inflationary pressure and the impact of the nearly 3-month long strike at its U.S. cereal plants last quarter, which hit production and pinched margins as Kellogg (NYSE:K) hired temporary workers at higher wages.

Adjusted gross margin for the reported quarter fell to 30.2% from 34.2% a year earlier.

Shares of the Michigan-based company rose about 2% before the bell.

Kellogg expects adjusted full-year profit per share to rise between 1% and 2% on a currency-neutral basis. Analysts on average estimated a 0.1% rise, according to Refintiv IBES.

Net income attributable to Kellogg rose to $433 million, or $1.26 per share in the fourth quarter ended Jan. 1, from $205 million, or 59 cents per share, a year earlier.

Excluding items, Kellogg earned 83 cents per share, beating estimates of 79 cents.

Net sales fell to $3.42 billion in the fourth quarter from $3.46 billion a year earlier but beat the consensus estimate of $3.39 billion.