NEW YORK (AP) — Sara Lee Corp. said Thursday that its fiscal second-quarter net income shrank on a slew of charges before it splits into two companies.
But shares rose 4.5 percent in midday trading, hitting a 13-month high, after adjusted results exceeded Wall Street's expectations.
Sara Lee will separate into an international coffee and teas business and a meats company. The spin-off of the CoffeeCo beverage business is on track to be completed in the company's fiscal fourth quarter, which ends in June.
On Thursday, the company posted net income of $468 million, or 79 cents per share, in the three months ended Dec. 31. That's down 44 percent compared with $831 million, or $1.30 per share, in the same period the year before.
Excluding costs and gains from restructuring and selling off assets and other one-time items, Sara Lee said it posted adjusted net income of 27 cents per share from its continuing operations, up from 21 cents per share a year earlier.
Revenue rose 6 percent to $2.08 billion from $1.96 billion.
Analysts polled by FactSet, who usually strip out one-time items from their estimates, expected a profit of 25 cents per share on revenue of $2.13 billion.
The company said sales in its coffee and tea unit continued to improve, and price increases now cover the higher cost of commodities for the first time since the spike in the price of raw materials.
The meat business showed a "marked improvement," Sara Lee said, as volumes declined less steeply in the recent quarter than in the previous three months.
Bakery categories lagged as higher prices weren't able to offset rising costs.
For all of fiscal 2012, it still expects adjusted earnings of between 89 and 95 cents per share, on revenue of $7.9 billion to $8.15 billion. Analysts currently predict Sara Lee will earn 91 cents per share in the fiscal year ending in June, on revenue of about $8.2 billion, on average.
The stock gained 85 cents to $19.87 in midday trading, after earlier peaking at $19.91, its highest level since January 2011.