(RTTNews) - Processed and packaged foods company Sara Lee Corp. (SLE: News ), Thursday, reported a 23% year-over-year increase in profit for the first quarter, boosted by higher margins and cost cutting initiatives, despite a 7.4% decline in net sales.

The company also returned to a profit after reporting a loss in the previous quarter. The company benefited from strong performance in the North American business segments and lower corporate expenses. The company also raised its adjusted earnings outlook and reaffirmed its sales forecast for the full year 2010.

In a statement, chairman and chief executive officer, Brenda Barnes said, "I'm very pleased with our first quarter performance, which demonstrates substantial bottom-line improvement. A number of factors contributed to our results, including lower input costs, Project Accelerate cost savings and pricing discipline."

The company also added that it is increasing or maintaining its market share positions in many of the key categories behind important new products such as Hillshire Farm Family Size lunchmeat tubs, Jimmy Dean D-Lights breakfast sandwiches and various new Senseo coffee pods in its international markets.

First Quarter Results

The Downers Grove, Illinois-based company reported net income of $284 million or $0.41 per share for the first quarter, higher than $230 million or $0.32 per share in the prior-year quarter, driven by discontinued operations. The company also returned to a profit after reporting a loss in the previous quarter.
Income from discontinued operations for the quarter was $94 million, higher than $39 million in the year-ago quarter, primarily due to the recognition of $53 million of net tax benefits. The international household and body care businesses are now being reported as discontinued operations.

Excluding discontinued operations, income from continuing operations for the quarter edged down a million to $190 million, with earnings per share remaining flat with the year-ago quarter at $0.27 per share.

The company said its latest quarter results included several significant items that had a net positive impact of $0.03 per share, while prior year results had a net benefit of $0.01 per share from significant items.

Excluding items, adjusted earnings grew to $0.32 from prior year's $0.26, and continuing operations, excluding significant items, rose to $0.38 from last year's $0.31. On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.16 per share for the quarter. Analysts' estimates typically exclude special items.

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