Safeway's first-quarter profit more than tripled to exceed analyst expectations, but the nation's third-largest grocer warned that its earnings...
Safeway’s first-quarter profit more than tripled to exceed analyst expectations, but the nation’s third-largest grocer warned that its earnings are likely to falter in the current quarter.
The company said yesterday that its net income surged to $131.3 million, or 29 cents per share, for the three months ended March 26. That surpassed Safeway’s profit of $43.1 million, or 10 cents per share, a year ago.
Revenue for the period totaled $8.62 billion, a 12 percent improvement from $7.68 billion at the same time last year.
After stripping out the costs of a crippling Southern California strike and Illinois store closures that depressed the company’s results last year, Safeway said it would have earned 43 cents per share in last year’s first quarter.
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Safeway’s start for this year topped analyst expectations of 25 cents per share, according to Thomson Financial.
Safeway projected second-quarter earnings also will be around 29 cents per share, missing analyst estimates of 34 cents per share. The company earned 35 cents per share in last year’s second quarter.
The grocer’s gross profit margin — essentially how much money the grocer makes from its sales — declined in the first quarter, falling to 29.2 percent from 30.2 percent last year.
Safeway’s shares dropped 99 cents, or 4.5 percent, to close yesterday at $20.98. The shares have ranged between $17.26 and $25.64 during the past year.
Signups increase, but loss widens
Charter Communications, the nation’s third-largest cable-television provider, yesterday reported a wider first-quarter loss than a year ago but said increased signups to its high-speed Internet services powered revenues.
The suburban St. Louis-based company said it lost $353 million, or $1.16 per share, for the January-March period, compared with a loss of $294 million, or $1 per share, a year ago. Excluding the contribution of cable assets that since have been divested, the loss for the year-ago quarter on a pro forma basis was $391 million, or $1.32 per share.
Analysts surveyed by Thomson Financial were expecting a loss of 82 cents per share.
Charter — controlled by Microsoft co-founder Paul Allen — said it added 94,000 high-speed Internet and 19,900 digital video customers during the quarter, partly offset by a loss of 6,700 analog video customers. But the company managed to increase revenue per analog customer by 11 percent.
Charter shares rose 3 cents, or 2.8 percent, to close at $1.10 yesterday, near the lower end of their 52-week range of $1.06 to $4.20.
Marsh & McLennan
Results not as low as analysts expected
Marsh & McLennan, the nation’s largest insurance brokerage, yesterday reported slimmer first-quarter profit on lower earnings from risk and insurance services and investment management. But the results were better than analysts expected.
Net income totaled $134 million, or 25 cents a share, in the January-March period, down from $446 million, or 83 cents a share, a year earlier.
Excluding charges for restructuring, employee retention, regulatory penalties and other expenses, earnings would have been 52 cents a share, Marsh & McLennan said.
That was ahead of the 49 cents expected by analysts surveyed by Thomson Financial.
The company was at the center of an investigation launched by New York Attorney General Eliot Spitzer into bid rigging, price fixing and the use of hidden commissions to steer property and casualty-insurance contracts.
Last January, the company agreed to pay $850 million in restitution over several years to settle Spitzer’s allegations. It also pledged to reform its commission practices.
Michael Cherkasky, president and chief executive officer, told a conference call with analysts that “we’ve been in a crisis, we’re coming out of that crisis.” But, he warned, “there may be some bumps on the way,” including further charges against former Marsh employees.
Marsh & McLennan shares rose 15 cents to close at $28.25 yesterday.
Compiled from The Associated Press