DOWNERS GROVE, Illinois (AP) — Sara Lee Corp. cut its full-year earnings outlook Thursday and said it is considering selling its international bakery and North American refrigerated dough businesses.
The food maker already has sold off numerous business lines and announced plans to split into two companies.
The latest moves came as Sara Lee said it returned to a profit in its third quarter, partly because last year's quarter included a large tax charge.
The new outlook for the maker of frozen desserts and Senseo coffee came in below Wall Street estimates on Thursday because of competition in its international bakery business and volume pressures.
Sara Lee earned $153 million, or 25 cents per share, for the period ended April 2. A year ago it lost $336 million, or 49 cents per share.
Adjusted earnings from continuing operations climbed to 24 cents per share from 22 cents per share. Last year's quarter included 76 cents per share in tax-related charges.
Analysts polled by FactSet expected 25 cents per share.
Revenue rose 7 percent to $2.22 billion, with higher sales for its North American retail, North American food-service and international beverage businesses, partly because of higher prices. Wall Street expected $2.23 billion.
Sara Lee said its Jimmy Dean and Hillshire Farms brands reported volume growth. Within the North American food-service unit, strength was seen in meats, frozen bakery and liquid coffee.
International bakery revenue dropped 7 percent due to soft results from its Spanish fresh bakery business, which is struggling with competition and a challenging economy.
Like many food and beverage makers, the Downers Grove, Illinois, company is struggling with higher prices for coffee, meat, wheat and other ingredients and has increased prices across nearly all of its products in response. It previously disclosed that it plans to make price increases all year.
Sara Lee says it is on track with plans to split into two companies. Sara Lee announced at the end of January that it would be splitting in two by early 2012.
Sara Lee will keep its name and current location with one company, which will concentrate on its North American retail and food service businesses.
The other company, which doesn't have a new name yet but is being called CoffeeCo, will keep the international bakery and beverage businesses.
Sara Lee said the sale of its North American fresh bakery business is expected to close by the end of the fiscal year, while the sale of its insecticides business is targeted to close in the second half of the calendar year.
Sara Lee also announced that it is buying Aidells Sausage Co. for $87 million in cash to help strengthen its North American meat business and broaden its presence in organic and natural meats. The transaction is expected to close in the next few months.
For the full year, Sara Lee now anticipates adjusted earnings from continuing operations between 79 cents and 83 cents per share. Its previous guidance called for earnings in a range of 85 cents to 89 cents per share.
Analysts predict earnings of 86 cents per share for the year.