Sara Lee's Net Drops on Items, But Beats By $0.01

| About: Hillshire Brands (HSH)

Sara Lee reported a 40% decline in fiscal first-quarter net income to $200 million, or $0.28/share, a penny better than analysts had forecast. The decline was due to a number of items, including a $0.21/share tax benefit in the prior period. Sales rose 8.3% to $3.13B and operating income increased 15.5% to $294M. Sara Lee attributed its sales growth to strength in its international segments. Sara Lee offered full fiscal year 2008 EPS guidance of $1.00 to $1.06. The company boosted its spending on advertising and promotions by 21.1% to support new product launches and build brand awareness. CEO Brenda C. Barnes has high expectations of the company's new and innovative products, saying they will be the "bedrock" for a successful 2008. She also commented that "... in the face of historically high commodity prices we were able to offset the increases with appropriate pricing actions." (Earnings call transcript later today). Shares of Sara Lee gained 0.4% to $16.31 on Tuesday and were up 2.6% to $16.73 in thin pre-market trading.

Sources: Press release, MarketWatch
Commentary: Sara Lee: One To Watch
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Tagged: , Processed & Packaged Goods, Earnings
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