Sara Lee loses money in 3rd-qtr, adjusted results beat Street; lifts 2010 profit outlook

Sara Lee posts 3Q loss but raises outlook

DOWNERS GROVE, Ill. — Sara Lee Corp. lost money in its fiscal third quarter, pulled down by a tax charge and other items, the food maker said Thursday.

But the company raised its 2010 adjusted earnings guidance above Wall Street’s expectations.

Sara Lee reported a loss of $336 million, or 49 cents per share, for the quarter that ended March 27, compared with net income of $165 million, or 24 cents per share, a year ago.

Excluding $518 million tax charge and other items, the company earned 29 cents per share, beating expectations. Analysts polled by Thomson Reuters expected the company to earn 21 cents per share. Analyst estimates typically exclude one-time items.

Revenue was flat at $2.58 billion, as favorable currency exchange rates offset lower prices and a drop in sales volume as it exited certain parts of its meat business.

The revenue missed analyst’s $2.71 billion estimate.

Sara Lee has trimmed its business lines recently to increase its focus on its core food and beverage business.

During the quarter, the company’s North American retail sales rose more than 4 percent on the strength of its Jimmy Dean, Hillshire Farms and Ball Park brands. And sales for the company’s international beverage business grew nearly 8 percent thanks to expanded coffee lines and foreign exchange rates.

But the company’s North American fresh bakery and food-service business saw sales fall.

The company said it expects all of its business segments to increase their operating income during 2010 and in turn, raised its guidance for the year.

Sara Lee said it expects to earn 60 to 64 cents per share for the full year or $1.06 to $1.10 per share on an adjusted basis, up slightly from its guidance in March.

Analysts anticipate the company will earn $1.05 per share for the year.