- Chicago Tribune -
News on Sara Lee\'s profits during the most recent quarter. The Downers Grove-based company\'s North American meat and its international coffee divisions did particularly well on the profit front, although some analysts pointed out that
Sara Lee\'s overall growth during the quarter, as measured by volume, was relatively anemic.Buoyed by lower commodity prices and a cost-cutting offensive,
Sara Lee Corp. beat Wall Street profit expectations in its most recent quarter, and the packaged-food producer raised its earnings guidance for the full year.
The Downers Grove-based company's North American meat and its international coffee divisions did particularly well on the profit front, although some analysts pointed out that Sara Lee's overall growth during the quarter, as measured by volume, was relatively anemic.
The maker of Jimmy Dean sausages, Hillshire Farm deli meats and its namesake baked goods said Thursday that profit for its fiscal second quarter, ended Dec. 26, totaled $371 million, or 53 cents per share, compared with a loss a year earlier. Excluding one-time items and discontinued operations, net income was 28 cents per share.
That topped analysts' estimate of 23 cents per share, though Sara Lee's revenue of $2.9 billion was a bit shy of Wall Street's forecast of $3.1 billion.
In addition, Sara Lee posted a big gain in its adjusted operating profit margin, with that key financial gauge rising to 11.2 percent during the quarter from 6.2 percent during the same period a year earlier.
"We think the quarter was fantastic," Sara Lee CEO Brenda Barnes said in an interview. She said profitability improvements were driven by a combination of lower commodity costs, an ongoing cost-reduction plan and investments in the company's key brands.
But Erin Swanson, a stock analyst at Morningstar Inc., said Sara Lee's results "are still being weighed down by low (sales) volume."
Sara Lee posted a 1 percent decrease in volume during the quarter compared with the same time in 2008. But excluding the impact of meat businesses it plans to exit, sales volume increased 0.7 percent, and the second quarter was a marked improvement over Sara Lee's first quarter in terms of volume trends.
Sara Lee's stock slipped 12 cents, or 1 percent, to $12.32, while the broad market tumbled more than 3 percent.
For the second consecutive quarter, Sara Lee increased its profit guidance, saying it expects full-year adjusted earnings per share to range between $1 and $1.05. That's an increase of 9 cents to 10 cents from the previous guidance.