BATTLE CREEK, MICH. — Higher prices and cost cuts helped offset declining sales and drive a 13% increase in second-quarter earnings at The Kellogg Co. Net income in the second quarter ended July 4 totaled $354 million, equal to 93c per share on the common stock, up from $312 million, or 82c per share, in the same period a year ago.

Net sales were $3,229 million, down 4% from $3,343 million a year ago.

"We remain committed to delivering sustainable and dependable performance as we work through the current tough economic environment," said David Mackay, chief executive officer. "This focus continued to provide strong returns in the second quarter, which were ahead of expectations. We now enter the second half of this year with increased confidence in our ability to deliver on our long-term targets, as well as the visibility and flexibility to increase our investments for future growth."

Operating profit at Kellogg North America rose 12% to $426 million while net sales climbed to $2,176 million from $2,127 million.

Retail Cereal posted internal sales growth of 4%, while Retail Snacks had sales growth of 3%. The North America Frozen and Specialty Channels posted internal net sales growth of 5%.

At Kellogg International, net sales fell 13%, although on an internal basis — which excludes the effects of currency translation and acquisitions — net sales grew 2%. The Latin American region posted internal sales growth of 8%, the Asia Pacific region rose 3%, and Europe eased 1%.

Operating profit at Kellogg in the second quarter rose 4% to $553 million, up from $530 million in the same period a year ago.

Kellogg reaffirmed its full-year guidance of 3% to 4% internal sales growth while raising its internal operating profit growth to the high end of its previously guided mid single-digit range.

"With strong brands, solid business fundamentals and our focus on managing the business for the long term, Kellogg Co. is well positioned in the marketplace to continue delivering sustainable and dependable performance," Mr. Mackay said.

For the six months ended July 4, net income was $675 million, or $1.77 per share, up 8% from $627 million, or $1.64 per share, in the same period a year ago. Net sales were $6,398 million, down from $6,601 million.