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PORTLAND — Sara Lee Corp. narrowed its loss in the fiscal fourth-quarter but gave a weak outlook for the year, sending shares of the food maker plunging Wednesday.
The news left the company's stock as by far the lowest performer in the S&P 500, falling $1.08, or 10 percent, to $9.72. The index as a whole rose 1.3 percent.
Sara Lee is one of the few food makers losing money during the recession, said Christopher Shanahan, an analyst with Frost & Sullivan.
"They are going to want to forget 2009," Shanahan said.
Major food makers like Kraft Foods Inc. and Kellogg Co. have had their challenges but generally have benefited from of people keeping their spending focused on necessities like food and eating more meals at home.
The maker of Sara Lee breads, Jimmy Dean sausages and other products saw its revenue shrink by 10 percent to $3.16 billion, as growth in its North American business was offset by the negative impact of currency exchange on its international business.
Sara Lee reported a loss of $14 million, or a loss of 2 cents per share for the quarter, compared with a bigger loss of $672 million, or 95 cents per share, a year ago.
Excluding impairment charges of $207 million at its Spanish bakery business and $61 million in other charges, earnings per share were 29 cents.
Analysts, who usually exclude one-time items, expected the Downers Grove, Ill.-based company to earn 24 cents per share and revenue of $3.27 billion.
For the full-year, Sara Lee earned $364 million, or 52 cents per share, compared with a loss of $41 million, or a loss of 11 cents per share a year ago. Sales declined 3 percent to $12.88 billion because of unfavorable exchange rates.
Analysts expected 82 cents in earnings and revenue of $12.98 billion.
Sara Lee doesn't have the product lineup and geographic advantages of its competitors, Frost & Sullivan's Shanahan said. He cited weaknesses including food products in low-margin areas like bakery where shoppers tend to shift brands frequently and a heavy emphasis in personal care products overseas, where it is competing against industry giant Unilever.
"I think they are going to be a different company in five years in terms of product lines," Shanahan said.
The company announced earlier this year that it was considering selling the personal care business and said Wednesday it is still considering all its options.
Looking forward, Sara Lee expects to earn between $1.03 and $1.09 per share for fiscal 2010, including 19 cents in gains from the sale of its tobacco business in fiscal 1999.
Sales are expected to be between $12.9 billion and $13.2 billion, just shy of analyst expectations of $13.33 billion.
Adjusted earnings are anticipated between 84 and 90 cents per share, well below analyst expectations of 92 cents per share.
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AP Retail Writer Betsy Vereckey contributed to this report from New York.
