Kellogg has slashed its full year earnings forecast after it reported lower sales and net profit for the second quarter of the year.

Earnings for 2014 are now predicted to sit between US$3.81 and US$3.89 per share. They were previously forecast to hit between US$3.89 and US$3.97 per share.

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Kellogg now estimates its sales will fall 1-2% this year, compared to its previous forecast of a 1% increase.

The cereal and snacks giant posted a 15% drop in net income of to US$295m for the period ended 28 June.

Excluding the impact from mark-to-market accounting, the costs associated with its Project K efficiency programme and the integration costs related to the Pringles acquisition, Kellogg said earnings per share were US$1.02 “broadly in line with the company’s expectations”.

Operating profit fell 18.1% to US$467m as a result of higher cost of goods and selling expenses as well as the costs associated with Project K. Underlying operating profit was down 7.2%.

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Sales dropped 0.8% to US$3.7bn. Pressure was seen across Kellogg’s morning foods and snacks divisions in the US, which saw sales fell 5% and 2.6% respectively.

For the first half, sales were down from US$7.6bn to US7.42bn.

Operating income was up from US$1.07bn to US$1.08bn, However, underlying internal operating profit, a Kellogg measure that excludes items like foreign exchange, M&A and Project K, fell.

Net income was up from US$663m to US$701m.

Chairman and CEO John Bryant remained confident Kellogg was on the right track.

“Our Project K efficiency and effectiveness program continues to go well, and we are in the very early stages of the increased investment we are making in our developed-markets business. We know that improvement will take some time, but we believe we are making the right decisions to drive profitable revenue growth in the future.”

Shares in Kellogg were down 2.97% at 09:43 ET.