Shares of Sara Lee (NYSE:SLE) jumped Thursday after the meat packager reaffirmed its fiscal guidance despite headwinds and said its first-quarter profit beat expectations when excluding special items.
The Downers Grove, Ill.-based processor of Jimmy Dean and Hillshire Farm meat brands swung to a net loss of $215 million, or 37 cents a share, compared with a year-earlier profit of $194 million, or 29 cents a share, in the same quarter last year.
However, excluding one-time items, the company earned 18 cents a share, just ahead of average analyst estimates polled by Thomson Reuters of 17 cents.
Revenue for the three months ended Oct. 1 was $1.94 billion, up 12.5% from $1.73 billion a year ago, just missing the Street’s view of $1.98 billion.
The results were led by a 14% sales increase in its coffee and tea segment, partially offset by a slight decline in its meats group. The company said it implemented cost reductions and reorganizations in its meat business and integrated the newly acquired Aidells brand.
In North America, retail sales slipped 2% as the positive impact of higher prices succumbed to declines in volume and higher commodity costs, which were up by $153 million.
Still, the company reaffirmed its earnings guidance in the range of 89 cents to 95 cents a share, despite what it called “headwinds from unfavorable foreign currency exchange rates and the reclassification of N.A. Foodservice Beverage as a discontinued operation.”
The company, which is preparing to split its meat and beverage businesses into two independent companies, lowered its fiscal sales view to a range of $7.9 billion to $8.15 billion.
Analysts are predicting sales of $8.5 billion and earnings of 91 cents a share.
As per its panned spin-off, Sara Lee said it expects to deliver a special dividend of $3 a share in the first half of the year in 2012 before the deal is completed.