George Weston, the Canadian food group, saw quarterly net earnings boosted by the sale of its US bakery business – but the company revealed that operating income tumbled by more than 48% during the first three months of 2009.

Weston, which last year sold its US bakery operations to Mexico’s Grupo Bimbo, today (12 May) booked net income of C$863m (US$783m) for the three months to 28 March – compared to C$131m a year earlier.

However, Weston’s operating income fell 48.2% to C$101m, with operating margins slashed from 2.9% last year to 1.4% in the first quarter of 2009. Sales, meanwhile, rose 2.7% to C$7.02bn.

The company’s operating income was hit by foreign exchange losses, a goodwill impairment charge at its biscuits business and stock-based compensation.

Weston, however, struck a positive tome when discussing its first-quarter results.

“Excluding the impact of the specific items noted above, operating income in the first quarter of 2009 was strong compared to the same period in 2008,” the company said.

“The Weston Foods operating segment experienced increases in costs related to certain ingredients, primarily flour and oils, and other input items as compared to the first quarter of 2008. However, a combination of the pricing actions implemented in 2008 and cost reduction initiatives resulted in positive operating income growth in the first quarter.”