Safeway’s Q3 Profit Slides 4.7%; Says Full-Year Profit Will be in Low End of View (SWY)

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Supermarket chain operator Safeway Inc.( SWY ) on Thursday said its third quarter profit fell 4.7% from last year, hurt by lower revenue, but results were still enough to beat analyst expectations.

The Pleasanton, CA-based company reported third quarter net income of $122.8 million, or 33 cents per share, compared with $128.8 million, or 31 cents per share, in the year-ago period.

Revenue fell 1% from last year, to $9.4 billion.

On average, Wall Street analysts expected a smaller profit of 31 cents per share, albeit on higher revenue of $9.64 billion.

Looking ahead, the company said its full-year profit would likely be at the low end of its previously-announced range of $1.50 to $1.70 per share.

Safeway shares fell 32 cents, or -1.5%, in premarket trading Thursday.

The Bottom Line
We have avoided shares of SWY since our early June 2008 coverage began, when the stock was trading at $31.04. The company has a 2.25% dividend yield, based on last night's closing stock price of $21.32. The stock has technical support in the $18-$19 price area. If the shares can firm up, we see overhead resistance around the $23-$24 price levels. We would remain on the sidelines for now.

Safeway Inc.( SWY ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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