US: Sara Lee adjusts outlook on earnings drop

US food group Sara Lee posted a drop in third-quarter earnings today (7 May) and readjusted its full-year outlook.

For the period ended 28 March, the company recorded a net profit of US$165m, down from $211m in the same quarter of the previous year.

Excluding items, earnings per share rose to 25 cents from 22 cents.

Net sales also declined, dropping 6.6% to $3.03bn hurt by lower sales in the foodservice and international business segments. This was primarily due to unfavourable foreign currency exchange rates and unit volume softness resulting from challenging economic conditions in key European markets.

Excluding currency changes, divestitures and acquisitions, sales would have risen 2.1%.

Despite this, operating income for the period increased 8.3% to reach $262m. Third-quarter adjusted operating income increased 30.1% from the prior year, primarily driven by strong performance in the North American retail and international beverage segments, as well as higher commodity mark-to-market gains and lower corporate expenses.

"We continue to achieve meaningful bottom-line growth and see positive trends in the face of a very difficult global economy," said chairman and CEO Brenda Barnes. "Of particular note, our North American retail and foodservice segments have improved adjusted operating segment income in the last four quarters and are well positioned for the full year."

Sara Lee said it expects full-year fiscal 2009 earnings to be in the range of $0.73 - $0.79 per share, compared to its previous outlook of $0.72 - $0.79 per share.

The company said it expects its 2009 net sales outlook to be in the range of $12.8bn - $13bn.