Sara Lee 1Q Profit Rises 23.5% On Cost Cuts; View Raised
DOW JONES NEWSWIRES
Sara Lee Corp. (SLE) fiscal first-quarter earnings rose 23.5% amid lower costs
as results exceeded analysts' expectations.
The company also raised its fiscal-year earnings forecast by 6 cents a share
to a range of 90 cents to 96 cents a share and affirmed its net sales guidance.
The packaged-food industry has benefited as consumers cut back on eating at
restaurants and spend more on groceries, though those with food-service units
have been hurt. Food companies also have faced greater competition from less
expensive store-brand, or private-label, items.
Sara Lee is selling its international skin-care and deodorants business to
Unilever NV (UN, ULVR.LN), the latest step in a four-year effort to shed slower-
growth businesses and focus on food and beverages.
For the quarter ended Sept. 26, Sara Lee reported a profit of $284 million, or
41 cents a share, up from $230 million, or 32 cents, a year earlier. Excluding
items such as expenses related to asset sales, earnings rose to 38 cents from 31
cents.
Revenue decreased 7.4% to $2.59 billion, or 3.3% excluding divestitures and
foreign-exchange effects.
Analysts polled by Thomson Reuters most recently forecast earnings of 16 cents
on revenue of $3.16 billion.
Gross margin rose to 37.4% from 34.9% on the cost cuts.
North American retail segment earnings rose 45%, primarily on lower input
costs, though volumes weakened.
Shares closed Wednesday at $11.40 and didn't trade premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@
dowjones.com;
(END) Dow Jones Newswires
11-05-090819ET
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