Sara Lee Reports Mixed Q1 Results

Sara Lee (SLE 11.84, +0.44) reported mixed first quarter results this morning and issued fiscal year 2010 guidance.

The company reported first quarter earnings per share of $0.24, excluding non-recurring items, $0.08 better than the First Call consensus of $0.16. Revenues fell 7.4% year-over-year to $2.59 billion vs. the $3.16 billion consensus. Net sales declined due to unfavorable foreign currency exchange rates, volume declines and strategic business exits.

Adjusted operating income increased 79.2%, primarily driven by strong performance in the North American business segments and lower corporate expenses.

Note, during the quarter, Sara Lee announced that it received a binding offer from Unilever (UL) to acquire Sara Lee's global body care and European detergents businesses. This will enable Sara Lee to focus on its core food and beverage businesses. It's not clear if the consensus estimates include the discontinued operations.

For fiscal year 2010, the company expects EPS of $0.90 to $0.96, excluding non-recurring items, vs. $0.89 consensus. Note, the fiscal year guidance and apparently the consensus include these discontinued operations. On an adjusted basis and only for continuing operations, Sara Lee expects FY10 EPS of $0.68 to $0.72.