NEW YORK — Sara Lee Corp.’s earnings plummeted in the first quarter of fiscal 2006, mostly due to a 22-cent-per-share charge for the impairment of goodwill, intangibles and property in the European Branded Apparel and U.S. Retail Coffee businesses, which were sold during the quarter.
There was also a 5 cent charge per share related to the implementation of the company’s turnaround plan, business exit costs and accelerated depreciation.
Net income for the quarter ended Oct. 1 fell to $67 million, or 9 cents a diluted share, from $352 million, or 44 cents, in the prior year. Income from continuing operations was $253 million, down 26 percent from $344 million a year prior. Net sales from continuing operations totaled $4.3 billion, down 2 percent from $4.4 billion.
Regarding the timing of the spin-off of its apparel business, the company said it should occur between June and September. During the most recent quarter, this business reported net sales of $1.25 billion.
The company is expecting gains in all of its business segments in the second quarter except for household and body care. Second-quarter guidance has earnings per share between 25 to 30 cents, compared with 41 cents a year ago, while full-year earnings are expected to be between 97 cents and $1.07, up from 90 cents a year earlier. The full-year guidance does not include any transformation-related charges, gains or losses from business dispositions, or further impairment charges that may occur in subsequent quarters.