Earnings Preview: Sara Lee

Sara Lee Corp. (SLE) is expected to report Q2 earnings Wednesday with a conference call scheduled for 8:00 am ET.

Guidance

Analysts are looking for the company to post Q2 EPS of 24c on revenue of $3.42B. The consensus range is 20c to 26c for EPS, and revenue range of $3.39B to $3.45B, according to First Call. In December, Sara Lee announced that it will be the exclusive provider of Dunkin' Donuts coffee to food-service outlets, leading some analysts to predict up to a 20% gain for the company's coffee segment.

Analyst analysis

Bernstein Research recently rated the company Outperform, stating that they think Sara Lee has eliminated the problems that lowered margins in Q1. Bernstein also noted that the company has guided for margin expansion in 2008, and thinks the company's valuation is low vs. peers. Bear Stearns upgraded Sara Lee to Peer Perform from Underperform. JP Morgan gave Sara Lee an Overweight rating, but removed them from their Focus List last month, stating that they don't believe the stock will reach their target by June, but they continue to find the shares undervalued.