Acquisition Boosts Supervalu Earnings

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Thanks to the purchase of the Albertsons grocery chain early last year, Supervalu Inc. reported Wednesday that its profit in the fiscal third quarter jumped more than 50 percent on revenue that more than doubled.


The Eden Prairie, Minn.-based grocery chain, the nation’s third largest, reported net income of $113 million (54 cents per share) for the third quarter ended Dec. 2. Net income was up 50.7 percent from $75 million (53 cents) for the same period a year earlier, but lower than analysts’ expectations of 56 cents per share.


Revenue for the grocery chain also surged, more than doubling to $10.7 billion, beating analysts’ expectation of $10.5 billion. The results included a 5-cent per share transaction cost from the Albertsons purchase, a 1 cents per share of expenses for stock options and 2 cents a share for securities issued by the company.


Chief Executive Jeff Noodle said that the chain will spend more than $1 billion during fiscal 2008 on new stores, remodeling existing stores and other capital investments.


The company left its fourth-quarter guidance unchanged at 59 cents to 66 cents per share and said it expects to earn $2.34 to $2.41 on revenue of $37 billion.


Shares in Supervalu were down 44 cents to $34.72 in midday trading Wednesday.

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