With the Beijing Olympics opening ceremonies today, I'm reminded that the best sprinters save enough energy for a final burst to the finish line. Sara Lee
The company missed earnings estimates back in February, but insisted this would change in the back half and Sara Lee would make it to a full year of $0.82-$0.88 of adjusted EPS. The final quarter made up for those misses (just barely), and you could hear contented sighs around the table yesterday as the company reported $0.83 of annual adjusted EPS. A squeaker for sure, but with so many companies revising expectations down these days, you have to admire a management team that holds the line and then delivers.
Unit volume grew 1% for the fourth quarter, which looks pretty solid considering Kraft
The company reported an earnings-per-share loss of $0.98 for the quarter, but previously announced one-time items related to goodwill impairment took a huge bite ($1.26) out of the results. Net of these unusual items, Sara Lee earned $0.28, $0.02 better than analyst expectations.
Despite these solid results, the stock traded down after the release. I've covered Sara Lee for a while now, and I think management could find a better way to present the "puts and takes" in their quarterly releases. There's no shortage of numbers, but they aren't organized in a way that makes year-over-year comparisons clear. The stock is rebounding today, as investors have had time to wade through all the tables.
Is Sara Lee a buy at this point? These days, I like the prospects of nearly all the consumer-products companies. As a whole, the segment has been able to increase prices without suffering significant volume hits, and it will benefit-big time if commodity and energy costs moderate -- which appears to be happening.
My top picks are still the best-in-breed companies, like Procter & Gamble
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