Sara Lee Beats, Warns

The firm says sluggish sales, higher commodity prices will cut into its earnings.
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Sara Lee (SLE) reported higher-than-expected second-quarter earnings on Tuesday, but tempered its report when it lowered its full-year forecast.

The firm said that it was lowering its EPS outlook for 2005 to $1.46 to $1.56 a share, vs. consensus of $1.64 a share, and said it expects third-quarter EPS to be 28 cents to 34 cents, compared with 47 cents in the same period last year. The company cited as causes higher commodities prices, weak consumer spending in Europe and tightened pricing competition.

Net income for the second quarter ended Jan. 1 rose 5% to 41 cents a share, besting analyst expectations of 38 cents a share, according to Thompson First Call. Sales rose 4% to $5.2 billion.