Sara Lee Corp. (SLE) on Thursday said its fiscal first-quarter profit plunged 81 percent, hurt by declining sales and a spate of restructuring charges, but the food and clothing company fared better than expected and its stock jumped after the news.

Net earnings for the quarter ended Oct. 1 sank to $67 million, or 9 cents per share, from $352 million, or 44 cents per share, a year earlier. The company said impairment charges, costs from restructuring and closing businesses reduced earnings by about 25 cents per share.

Excluding those items, earnings would have been 34 cents per share, exceeding the consensus estimate of analysts surveyed by Thomson Financial (search) of 26 cents per share.

That propelled shares in the company up 53 cents, or 3 percent, to $18.01 in morning trading on the New York Stock Exchange after earlier surging nearly 6 percent. The stock is still down sharply from its 52-week high of $25 in January, before it announced the ambitious restructuring.

Revenue totaled $4.31 billion, down 2 percent from $4.4 billion a year earlier and well short of the consensus target of $4.64 billion. Sales volume fell 3 percent.

Brenda Barnes (search), who took over as chief executive officer in February and was given the additional title of chairman last week, acknowledged the operating results were subpar.

"We knew this would be a tough quarter as we realigned our organization, began to change the culture, moved employees and changed jobs," she said of the company, which is in the process of selling assets and relocating to its new corporate headquarters in the suburb of Downers Grove, Ill. "The worst is behind us now."

The company attributed the revenue decrease to weakness in its foodservice and North American bakery businesses, where sales dipped 0.3 percent and 2 percent, respectively. Sales of household and body care products also slid 4 percent and apparel sales fell 8 percent.

Meanwhile, North American meat sales were up 3 percent, as international beverage and bakery sales rose a respective 4 percent and 3 percent.

Robert Campagnino, an analyst for Prudential Equity Group, said the results were better than expected but still disappointing, confirming that the company has a long way to go to complete its transformation.

"Bottom line for us is that the base business at Sara Lee continues to struggle," he said in a note to investors.

Leaving its guidance effectively unchanged with charges factored in, Sara Lee forecast second-quarter earnings of 25 cents to 30 cents per share and fiscal 2006 income of 97 cents to $1.07 per share.