(Reuters) - U.S. food and drink maker Sara Lee Corp SLE.N stood by its full-year forecast despite the loss of a business and a smaller boost from foreign exchange, sending its shares up 6 percent.
Sara Lee said it still expects adjusted earnings of 89 cents to 95 cents per share in fiscal 2012, even though the weakening euro reduced its expected foreign exchange benefit and the company announced a plan to sell its North American foodservice coffee business.
Those issues led the company to cut its full-year sales forecast to $7.9 billion to $8.15 billion, from a prior forecast of $8.5 billion to $8.75 billion.
“Though some investors may be disappointed with sales guidance reduction ... we suspect the building momentum behind the coffee and tea business and the fact that the company reiterated its full-year EPS guidance despite incremental headwinds ... may be enough to push shares incrementally higher,” said Barclays Capital analyst Andrew Lazar in a research note.
For the first quarter of fiscal 2012, which ended on October 1, Sara Lee reported a net loss of $217 million, or 37 cents per share, on Thursday, compared with a year-earlier net profit of $192 million, or 29 cents per share.
Excluding items, Sara Lee reported a profit of 18 cents per share, topping analysts’ average expectation by a penny, according to Thomson Reuters I/B/E/S.
Sales rose to $1.94 billion from $1.73 billion a year earlier. Analysts on average were expecting sales of $1.98 billion.
Sara Lee, based in a suburb of Chicago, is planning to split into two companies — one focused on North American meat brands including Jimmy Dean sausages and Ball Park frankfurters, and the other on international coffee and teas, with brands such as Douwe Egberts and Pickwick.
Sara Lee shares were up $1.11, or 6.3 percent, at $18.72 on the New York Stock Exchange.
Reporting by Martinne Geller in New York, editing by Maureen Bavdek, Bernard Orr