BATTLE CREEK, MICH. — Facing challenges from softening sales, increased competition and the continuing effects of a cereal recall, income at Kellogg Co. fell 6% during the third quarter.

For the quarter ended Oct. 2, the company had net income of $338 million, equal to 91c per share on the common stock, which compared with $361 million, or 94c per share, during the same quarter of the previous year. Sales for the quarter were $3,157 million, down 4% from $3,277 million during the same quarter of the previous year.

“We are disappointed with our third-quarter performance, which was due to softness in our businesses as well as a tough operating and deflationary environment driven by intense competition,” said David Mackay, chief executive officer. “Two-thousand-and-ten has been a challenging year, and as a result two weeks ago we lowered our full-year guidance to reflect the operating challenges.”

In the North America segment, the company posted operating profit of $404 million, down 3% from $415 million during the same quarter of the previous year. Sales in the segment for the quarter were $2,130 million, down 3% from $2,187 million.

For the nine months ended Oct. 2, the company as a whole had income of $1,058 million, or $2.80 per share, up 2% from $1,036 million, or $2.71 per share, during the same period of the previous year. During the nine months the company had sales of $9,537 million, down 1% from $9,675 million during the same period of the previous year.

For the full-year 2010, the company expects earnings per share to grow 4% to 5%.