NEW YORK (AP) — Sara Lee Corp. reported a small loss for its fiscal third quarter on Thursday, as the packaged food company wrote down one-time costs related to the planned spinoff of its coffee and tea business.
The maker of Hillshire Farm, Jimmy Dean and Ball Park products said that its adjusted income fell 34 percent. That missed Wall Street expectations.
Sara Lee plans to split into two businesses: the international coffee and tea company and a meats company. Both will be public companies. CEO Jan Bennink said the company is on track to complete the spin off by June 30.
The company, based in Downers Grove, Ill., reported a net loss of $2 million, which was breakeven on a per share basis, compared with a profit of $156 million, or 25 cents per share, a year earlier.
Its adjusted net income fell to $123 million, or 21 cents per share, down from $185 million, or 30 cents per share, a year ago. Analysts surveyed by FactSet expected adjusted earnings of 25 cents per share.
Total net sales rose to $1.9 billion from $1.86 billion, as pricing increases offset flat to lower volume. But operating income fell to $193 million, from $237 million, in part because of costs in its coffee and tea segment related to the spinoff.
The spinoff also led to greater corporate expenses, which rose to $113 million, from $47 million a year ago.
For the first time in two years, Sara Lee said it was able to recover increases in commodity costs. In the quarter, the company said price increases of $123 million helped offset total commodity cost increases of $92 million.
The company said it expects net sales for the year to be in the low end of the $7.9 billion to $8.15 billion range it predicted in February, with adjusted earnings per share expected to be in the middle of the 89 cents to 95 cents per share it forecast.
Analysts expect earnings of 93 cents per share on revenue of $7.99 billion for the year.
Shares of Sara Lee slipped 12 cents to $22.20 in midday trading after reaching a 52-week high of $22.35 on Tuesday. They are about 40 percent above their low for the past year of $15.66 per share in early October.