Hillshire Brands raises dividend, sets buyback

Reuters

Hillshire Brands Co raised its dividend by 40 percent and announced a share buyback plan on Thursday as it reported a slightly better-than-expected end to its first year as a stand-alone meat company.

The maker of Jimmy Dean sausage and Ball Park hot dogs, formerly known as Sara Lee, spun off its international coffee and tea business in June 2012 into D.E Master Blenders 1753 NV and changed its name to Hillshire Brands.

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It considered fiscal year 2013, which ended June 29, as a transition year during which it strengthened its advertising and innovation.

In the fourth quarter, operating income fell 23 percent due to a 2 percent decline in sales and planned investments in marketing and innovation.

Excluding one-time items, earnings were 26 cents per share, topping analysts' average estimate by a penny, according to Thomson Reuters I/B/E/S.

Net income was $41 million, or 33 cents per share, down from $599 million, or $5.02 per share, a year earlier.

Net sales fell 2 percent to $962 million, below analysts' expectations of $979.7 million.

The company raised its quarterly dividend to 17.5 cents per share from 12.5 cents and said it plans to buy back about $200 million worth of stock over the next two fiscal years.

It also said 2014 adjusted earnings per share should be flat to down at a mid-single-digit rate.

(Reporting by Martinne Geller in New York; Editing by Gerald E. McCormick and John Wallace)