Three-month TSX trading for George Weston
George Weston Ltd. reported a third-quarter profit of $179 million Tuesday, matching the amount it made a year ago, as sales increased by 4.4 per cent to $10.61 billion.
Earnings amounted to $1.28 per share, up from $1.25 per share for the same period last year, when it had sales of $10.16 billion.
The bottom line was hit by a writedown in the fair value of commodity derivatives of $63 million, or 31 cents a share. A year earlier, the company had a hedging gain of $13 million.
Weston, which owns 62 per cent of Loblaw Companies, Canada's largest supermarket operator, said operating profit was $413 million in the 16 weeks ended Oct. 4, up by 9.8 per cent from a year ago.
Operating profit margin improved to 3.9 per cent from 3.7 per cent.
The Weston Foods division "experienced significant increases in the price of flour, fuel and other input items as compared to the third quarter of 2007," the company said.
"However, a combination of pricing actions, changes in sales mix, and cost reduction initiatives resulted in positive operating income growth."
Three-month TSX trading for Loblaw CompaniesThe Loblaw division "showed some signs of progress towards its goal of becoming an effective selling organization," with better buying, cost management and operating procedures, the company said.
Loblaw reported last week that its summer-quarter earnings rose 32 per cent to $155 million as sales rose 3.8 per cent to $9.49 billion.
After the quarter ended, Weston Foods agreed in late October to sell its Neilson dairy operation to Saputo Inc. for $465 million in cash. The sale, which is subject to regulatory approval, is expected to be completed before the end of 2008.
"Despite challenging market conditions, Weston Foods expects satisfactory operating performance for the remainder of 2008, but it is difficult to predict the impact on reported earnings of mark-to-market adjustments resulting from a continuation of volatility" in commodity and equity markets.
The company said Loblaw remains focused on profitable sales momentum and continued progress in cost and operating efficiences, but "it is anticipated that the unpredictable economy and aggressive competitive environment will further challenge results for the remainder of 2008 and into 2009."
The majority owner of the company is W. Galen Weston, who serves as chair and president.
Shares of George Weston were up 82 cents to $63.70 in morning trading on the TSX. Loblaw shares rose 59 cents to $31.99.
With files from the Canadian Press
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