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Earnings Roundup / Safeway

Cost-cutting hikes profit 12%

February 27, 2009|Times Wire Reports

Safeway Inc. said cost-cutting and an extra week in the quarter helped its profit increase 12% in the fourth quarter, but the results missed Wall Street expectations.

Despite the profit gain, Pleasanton, Calif.-based Safeway continues to struggle with sluggish traffic and sales in the deepening recession.

Safeway said its profit grew to $338 million, or 79 cents per share, for the quarter ended Jan. 3, up from $301.1 million, or 68 cents, a year earlier. Revenue grew 3% to $13.82 billion.

Adjusted to exclude several one-time items, earnings amounted to 80 cents per share. Analysts polled by Thomson Reuters expected the company to earn 81 cents per share on revenue of $14.3 billion.

The company maintained a 2009 profit outlook of $2.34 to $2.44 per share. That's above the analyst consensus of $2.31 per share.

After the earnings news, shares of Safeway fell $2.75, or more than 13%, to close at $18.37. In after-hours trading, it edged up 32 cents, or 1.7%, to $18.69.

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