Land O'Lakes Inc.'s first-quarter sales increased 4% from a year ago, driven by strong sales of butter, but net earnings declined sharply, largely due to one-time legal charge.

Land O'Lakes had net earnings of US$30.9 million in the first quarter of 2010, down from a record US$82.7 million for the same period of 2009. The most recent quarter included a US$25 million charge related to the settlement of a class-action lawsuit brought against the company's MoArk egg subsidiary. The company said MoArk entered into the settlement to avoid the expense and distraction of protracted litigation.

"The company's first-quarter performance reflects the impact of a still challenging economy and volatile commodity markets," Land O'Lakes president and CEO Chris Policinski said in a statement. "This was particularly evident in our feed and industrial foods businesses, which are being affected by continued financial stress in many segments of agriculture. But even with these challenges, the fact that more than half of our business portfolio achieved higher sales is a strong confirmation of the value of our brands and the loyalty of our customers and consumers."