Sara Lee Earnings Rise 5 Percent
CHICAGO (AP) _ Sara Lee Corp. reported Wednesday that its quarterly profits excluding one-time charges rose 5 percent despite continuing weakness in its food operations.
Solid sales gains in household and body care, food service distribution and coffee and tea enabled the company to overcome another poor quarter for foods.
Earnings for the October-December period, the second quarter of Sara Lee’s fiscal year, were $389 million, or 42 cents a share. That compared with $371 million, or 39 cents a share, a year earlier, excluding special items including a charge for a processed-meat recall.
The earnings matched the estimate from analysts surveyed by First Call/Thomson Financial.
Sales were $5.33 billion for the quarter, up less than 1 percent from $5.29 billion a year earlier.
Sara Lee stock rose 37 1/2 cents, or nearly 2 percent, to $18.43 3/4 in trading at 5:15 p.m. on the New York Stock Exchange. It had touched its 52-week low of $18.06 1/4 on Tuesday.
Still, the report showed the Chicago-based company _ the world’s leader in packaged meats sales _ is still smarting from the effects of the recall of 15 million pounds of hot dogs and other meats in December 1998. Packaged meats sales slipped 7 percent for the quarter.
At least five lawsuits have been filed against Sara Lee over an outbreak of food poisoning that killed 15 people and sickened hundreds of others in 1998, prompting the recalls.
Sara Lee Foods’ showing was further hurt by a 10 percent drop in worldwide sales of Sara Lee Bakery products, which analysts said results partly from a mixed track record for new items. Sara Lee is the U.S. leader in frozen baked goods.
For the first six months of the fiscal year, net income was $647 million, or 70 cents a share, compared with $660 million, or 69 cents a share, in 1998. The 1998 earnings were 64 cents a share, excluding special items, the company said.
For the first six months of the fiscal year, sales edged up 1.3 percent to $10.28 billion from $10.15 billion a year earlier.