Food and beverage company Sara Lee reported weaker-than-expected quarterly results after sales volume was hurt by price increases meant to buffer soaring commodity costs.
The maker of Jimmy Dean sausages and Senseo coffee saw its shares fall 1.4 percent in premarket trading, even though it affirmed its full-year sales and earnings forecast.
Sara Lee said last month that it plans to spin off its North American meats business into a new publicly traded company that will retain the "Sara Lee" name after takeover bids proved to be unsatisfactory. The remaining company will be an international beverage business whose name has yet to be determined.
But Sara Lee said it could still be acquired before then.
The company reported net income of $880 million, or $1.37 per share, for the quarter that ended on Jan. 1, up from $371 million, or 53 cents per share, a year earlier.
Excluding a gain on the sale of discontinued operations, a tax benefit and other items, earnings from continuing operations were 24 cents per share, a penny short of the analysts' average estimate, according to Thomson Reuters I/B/E/S.
Net sales slipped 0.4 percent to $2.35 billion, as lower volumes and a weaker euro offset price increases and a larger proportion of higher-priced goods. Analysts on average were expecting $2.52 billion.
In the company's North American meats business, which includes Hillshire Farm lunch meat and Ball Park hot dogs, sales rose 1 percent despite a 4.9 percent decline in volume, as the company raised prices to offset rising commodity costs.
In the international beverage business, which includes Douwe Egberts and L'Or, net sales rose 2 percent, despite a 2 percent decline in volume.
Sara Lee's shares fell to $16.68 in premarket trading from Monday's close of $16.92 on the New York Stock Exchange.
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