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Shares of consumer goods giant Sara Lee (NYSE: SLE) have been taking a beating today after the company failed to meet analyst estimates for its fiscal third quarter.At first glance, it looked like a fantastic quarter for the company, as profit rose by a remarkable 82%, but things start to look less than rosy once we take a closer look. Analysts had been expecting to see the company show earnings during the quarter of 24 cents a share, and were disappointed to see the company come in below this, with only 22 cents a share.
This is the second quarter in a row in which the company posted weaker than expected earnings, and is quickly erasing the progress that the stock has been making since the beginning of March.
The company blamed the weak earnings for the quarter on volatile commodity prices, which, according to chairman and CEO Brenda Barnes, "continue to affect the industry."
Not only did the company fail to hit this quarter's numbers, it also put forth full year estimates that were below what Wall Street was hoping to see. Analysts had been expecting to see the company show earnings of $1 for full year 2008, but in today's announcement the company forecast full year earnings of between 95 and 99 cents a share.
Following today's earnings, the stock has been selling off pretty sharply, falling 6.1% to $13.86, or $0.90 on the day. As I noted above, the stock had been rebounding nicely over the past couple of months, but today's move has erased a large portion of the recent gains.
Let's take a look at a 12 month chart on the stock to see just how shares have been behaving lately:
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
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