010813 Sara Lee Earnings Up Sharply

Chicago - Sara Lee Corp., whose large stable of products includes Hanes underwear, Ball Park franks and Kiwi shoe polish, said net earnings in its fourth quarter more than tripled, mainly due to gains from the sale of some businesses including Coach leather goods.

The Chicago-based food and consumer-goods maker said net earnings in the period ended June 30, including an $862 million gain from the Coach sale, rose to $973 million, or $1.19 a share, from $313 million, or 35 cents a share, a year ago. Excluding unusual items, Sara Lee earnings fell 4.5% to $299 million, or 37 cents a share, in its fiscal fourth quarter.

Sara Lee was expected to earn 35 cents to 37 cents a share in the period, with a consensus at 36 cents, according to Thomson Financial/First Call, which tracks results.

Shares of Sara Lee fell 38 cents to $19.50 in midday trading on the New York Stock Exchange.

“Sara Lee completed an important transition year in fiscal 2001,” said Chief Executive Steven McMillan in a statement. “We also began a significant reorganization within several of our business units, including U.S. Meats and European Apparel, to improve our ability to compete effectively in the current business environment.”

In the past 13 months, Sara Lee has sold or spun off 12 non-core businesses for proceeds of nearly $3 billion, including Coach and PYA/Monarch, a food service distribution business. The company has been shedding less profitable units to focus on intimates and underwear, food and beverage and household products.

Fourth-quarter sales fell 5.3% to $4.23 billion, as the divestment of some businesses lowered overall revenues. The company said that sales and operating income in the quarter and the full year were hurt by weak currencies in foreign markets against the U.S. dollar.

The company continued to forecast a drop in fiscal 2002 earnings to $1.25 to $1.35 a share, from $1.36 in fiscal 2001. The forecast excludes the effect of an accounting change and the company's planned acquisition of bakery Earthgrains Co. Sara Lee sees fiscal first-quarter earnings of 21 cents to 24 cents.

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