Sara Lee Earnings Jump 53 Percent on Delayed Payout

Sara Lee Corp.'s (SLE) earnings climbed 53 percent in the first fiscal quarter, boosted by a delayed payout from the sale of its European tobacco business, the packaged-foods and apparel company announced Tuesday.

The Chicago-based maker of Ball Park hot dogs (search) and Hanes apparel (search) said it earned $352 million, or 44 cents a share, for the first quarter that ended Oct. 2, up from $230 million, or 29 cents a share, during the same period a year ago.

Analysts polled by Thomson First Call had predicted earnings of 43 cents a share.

Quarterly sales increased 4 percent to $4.9 billion from $4.7 billion, with restructuring in the company's meats and bakery businesses beginning to show positive results, officials said.

"Sara Lee delivered solid results this quarter, despite a very challenging commodity environment," chairman and chief executive C. Steven McMillan said in a prepared statement. "Sara Lee Bakery (search) continues to show outstanding improvement in profitability, and we are pleased to report that our Household Products business showed strong profit growth."

The $117 million payment is related to the divestiture five years ago of the company's Dutch-based cut tobacco business, Douwe Egberts Van Nelle (search), to Imperial Tobacco Group PLC. Under the terms of that deal, Sara Lee gets an annual payment of 95 million euros through 2010 if tobacco continues to be legal in the Netherlands, Germany and Belgium.

The payment in July contributed 15 cents a share to Sara Lee's latest profit, according to the company's filing with the Securities and Exchange Commission.

Sara Lee expects second quarter earnings of 35 to 40 cents a share, compared to 39 cents a share during the same period a year ago. The company said it still expects profit of $1.61 to $1.71 per share in 2005.

Shares in the company rose a penny to $22.45 on the New York Stock Exchange (search). They are up 3 percent in 2004.