Food and household goods maker Sara Lee Corp. , which has been grappling with reshaping its product lineup while trying to jump-start sluggish sales, Thursday said fiscal second-quarter net earnings fell nearly 80 percent.

Shares of the maker of Sara Lee cakes, Jimmy Dean meats, Hanes underwear and Kiwi shoe polish fell more than 5 percent by midafternoon Thursday, dropping $1.15 to $20.74 on the New York Stock Exchange.

"They've been trying to shuffle their portfolio, but their basic businesses' trends are still down," said William Leach, food industry analyst at Banc of America Securities.

Sara Lee said earnings for the quarter ended Dec. 29 before restructuring charges declined to $303 million or 37 cents a share, 2 cents short of Wall Street estimates, from $372 million or 43 cents a year earlier. Difficult retail markets and higher advertising and promotional spending contributed to the decline.

Net profit tumbled to $160 million or 20 cents a share from $798 million or 92 cents in the year-ago quarter.

In May 2000, Chicago-based Sara Lee announced a restructuring program aimed at narrowing the company's focus on three businesses -- food and beverage, intimates and underwear, and household products. Plans called for divesting or closing down some noncore businesses during fiscal 2001 and fiscal 2002.

Sales rose 5 percent from a year ago to $5 billion.

Analysts had expected Sara Lee to earn between 37 cents and 40 cents a share, excluding items, with a mean estimate of 39 cents, according to Thomson Financial/First Call, which tracks such forecasts.

MEDIA SPENDING

Sara Lee said it increased media spending 9 percent in the quarter as it tried to boost its key brands. The company will increase media spending for the fiscal year between 10 percent and 25 percent.

Still, unit volumes fell 1 percent in the quarter, excluding acquisitions and divestitures, the company said

"As far as it showing up in volumes, this kind of brand building can take some time and it's hard to know where volumes would have been, especially in light of the special influences that have been floating around," said Simon Burton, consumer staples analyst at Banc of America Securities.

The retail environment has been hard hit by the U.S. recession. Meanwhile, Sara Lee has had to stave off competition in its underwear business from Fruit of the Loom Inc. , hosiery sales have fallen globally, lower coffee prices have weighed on sales in that business and higher raw material prices have hurt its hot dog and smoked sausage businesses.

Looking ahead, Sara Lee said it expects diluted earnings per share for its fiscal third quarter to range between 29 cents and 32 cents, compared with the 27 cents earned from total operations in the year-ago period. Analysts forecast earnings of 30 cents to 32 cents a share, with a consensus of 31 cents, according to First Call/Thomson Financial.

Full fiscal year 2002 diluted earnings per share are expected in a range of $1.37 to $1.40, compared with $1.36 earned from total operations in fiscal 2001.

Restructuring actions recognized in the second quarter of 2002 reduced pretax income by $187 million and net income by $143 million, or 17 cents per diluted share.

During fiscal 2001 and the first quarter of 2002, Sara Lee approved plans to dispose of 18 businesses. During the second quarter of fiscal 2002, the expected losses related to these business dispositions were higher than estimated in fiscal 2001, and resulted in a $13 million reduction in pretax income, or slightly less than 2 cents a share.