Sara Lee income eases in second quarter

by Staff
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DOWNERS GROVE, ILL. — Net income at Sara Lee Corp. was $468 million in the second quarter ended Dec. 31, 2011, equal to 79c per share on the common stock, down 44% from income of $831 million, or $1.30 per share, during the same quarter of the previous year. Adjusted net income, meanwhile, fell 11% to $177 million from $198 million.

Sales for the quarter were $2,081 million, up 6% from $1,958 million during the same quarter of the previous year.

“The meat business showed a marked improvement in volume and mix trends in the quarter in response to course corrections,” said Marcel Smits, chief executive officer. “We made brisk improvement on the meat categories in the retail and food service businesses, while the bakery categories lagged. Coffee and Tea continued its upward trend and, importantly, operations in the key Western European countries continue to perform well. We are confident that we now have the market fundamentals in line to deliver on our guidance for the full year.”

North American Retail operating income totaled $81 million in the second quarter, down 4% from $84 million a year ago. Sales eased 0.1% to $741 million. Adjusted operating income for the segment was $88 million, up 5% from $84 million, while sales were down 0.1% at $741 million.

During the second quarter operating income for the Coffee & Tea segment was $140 million, up 29% from $109 million a year ago, while sales rose 11% to $998 million. Adjusted operating income for the Coffee & Tea segment totaled $144 million, up 2% from a year ago, while adjusted net sales rose 12% to $988 million.

Operating income in the North American Foodservice and Specialty Meats segment was $33 million, down 14% from $38 million, while sales rose 8% to $314 million from $290 million. Adjusted operating income in the North American Foodservice and Specialty Meats segment was $30 million, down 19% from $37 million a year ago, while sales rose 4% to $287 million.

For the six months ended Dec. 31, the company had income of $251 million, equal to 42c per share, down 75% from $1,023 million, or $1.58 per share, during the same period of the previous year. Sales for the period were $4,024 million, up 9% from $3,685 million during the same period of the previous year.

“We continue to see solid progress in our businesses as we head into the second half of our fiscal year,” said Jan Bennink, executive chairman. “We remain on track to complete the spin-off during the fourth quarter of the fiscal year. We have closed all announced business divestitures and have supplemented our core businesses with acquisitions that will strengthen our long-term growth profile. Each business now has the chief executive officer and chief financial officer in place, and they are assessing further changes to strengthen the organization. Finally, as we announced last week, we now have full control over the Senseo trademark and look forward to a continued partnership with Philips to leverage Senseo’s strong brand equity into new products and geographic market expansion.”

For fiscal 2012, the company said it anticipates adjusted earnings per share to be between 89c and 95c with overall sales of $7.9 billion to $8.15 billion.

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