DOWNERS GROVE, Ill. (AP) — Higher costs for ingredients squeezed Sara Lee Corp. in its second quarter, though net income more than doubled on the sale of part of its household and body care operations.
The maker of Jimmy Dean sausage and Ball Park hot dogs, which said last month it plans to split into two public companies, said Tuesday that its adjusted earnings fell to 24 cents per share from 27 cents, hurt by higher costs for coffee and meat.
Analysts surveyed by FactSet expected slightly higher earnings of 25 cents per share.
Quarterly results included a gain of 84 cents per share related to the December sale of its global body care and European detergents businesses and a tax benefit of 35 cents per share tied to the sale of the North American Fresh Bakery business.
Revenue for the period ended Jan. 1 was nearly flat at $2.35 billion because of the weaker euro and fell short of Wall Street's forecast of $2.9 billion.
Shares of the Downers Grove, Ill., company declined 4 cents to $16.88 in premarket trading.
Sara Lee earned $880 million, or $1.37 per share, in the quarter compared with $371 million, or 53 cents per share, a year ago.
Revenue at the North American retail segment edged up 1 percent on higher prices and the strength of core brands such as Jimmy Dean, Hillshire Farm and Ball Park. North American foodservice revenue fell 2 percent as it continues to be hurt by the loss of two big contracts.
International beverage revenue climbed 2 percent as the segment raised prices to deal with increased green coffee costs. At the international bakery business, revenue dropped 12 percent because of the tough economy in Spain and competition.
The company maintained its 2011 adjusted earnings guidance between 85 cents and 89 cents per share. Analysts anticipate net income of 89 cents per share for the year.
Sara Lee expects a strong second half, CEO Marcel Smits said in a statement, partly because of price increases during the first half. The international beverage operations are also raising prices and should see gains from product innovations, he added.
Sara Lee announced at the end of January that it would be splitting into two public companies, a process that should be complete in 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 has not been named but is being called CoffeeCo, will keep the international bakery and beverage businesses and potentially could be based overseas.