030155 Sara Lee Doubles Quarterly Profit

Chicago - Packaged goods giant Sara Lee Corp. more than doubled its profit in its fiscal second quarter, helped by cost savings from its restructuring and a favorable comparison to a difficult period a year ago.

Net earnings were $348 million, or 42 cents a share, in the three months ended Dec. 28, up from $160 million, or 20 cents a share, a year earlier. The year-earlier total was reduced by $143 million, or 17 cents a share, to reflect costs associated with its restructuring and business eliminations.

The latest results matched the consensus estimate of analysts surveyed by Thomson First Call.

Revenue climbed 2% to $4.78 billion from $4.69 billion.

Sara Lee, whose products range from Hanes underwear to Ball Park hot dogs to Endust furniture cleaner, said profit gains in its meats and household products divisions offset a down quarter for baked goods. It said the bakery business, which it also expects to show lower profit in the current quarter, is pressured by continued weakness in the U.S. fresh- bread market, where its sales fell by more than 3% despite success with new products.

Meat sales declined 2% from a year earlier, partly reflecting higher commodity costs, but operating income increased as it benefited from changes made in the company's two- year reshaping program.

The company said its profits would have been higher if it hadn't stepped up advertising and promotional spending by 14% in order to back new products such as Playtex and Bali gel-strap bras, IronKids crustless bread and Hillshire Farm ultra-thin deli meats.

"Our increased investment in media advertising and new product development is starting to accelerate the growth of our key brands," said C. Steven McMillan, chairman, president and chief executive officer.

McMillan said the company's restructuring initiatives had generated $65 million in savings over the past two quarters in comparison with the same period a year earlier.

For the first six months of its 2003 fiscal year, Sara Lee had net earnings of $656 million, or 80 cents a share, up from $402 million, or 49 cents a share. Revenues increased 4% to $9.31 billion from $8.93 billion

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