P. M. BRIEFING : Oat Bran Cuts Into Kellogg Earnings

Kellogg Co. said it expects its third-quarter earnings to be lower than the same period last year due to increasing competition for ready-to-eat oat bran cereal, triggering a sharp fall in the company’s stock.

The stock of the Battle Creek, Mich.-based cereal giant sank $2.75 to $70.875 in heavy afternoon trading on the New York Stock Exchange.

The company earned $145.7 million or $1.18 a share in the year-ago third quarter.

Kellogg Chairman and Chief Executive Officer William La Mothe said in a statement that archrival General Mills continues to gain market share aided by growing consumer interest in oat bran, high-fiber cereal touted as a cholesterol reducer.

He said the company expects an increase in earnings for the full year. Kellogg recently introduced Common Sense Oat Bran and is currently introducing nationally two new products, OatBake and HeartWise.