Safeway says adjusted profit rises, trims forecast

Thu Jul 18, 2013 9:41am EDT

(Reuters) - Supermarket chain Safeway Inc (SWY.N) on Thursday reported higher quarterly profit but revised its full-year forecast slightly lower.

The company, which recently announced the sale of its Canada assets and spun off its Blackhawk gift card unit, reported income from continuing operations of $68.1 million, or 28 cents per share, for the second quarter ended June 15. That compared with $47.6 million, or 20 per share, a year earlier.

Excluding the impact of increased legal reserves, Blackhawk initial public offering expenses and a gain from the sale of investments, profit from continuing operations in the latest quarter was 24 cents per share.

After adjusting for discontinued operations, the Blackhawk IPO and other items, the company set its forecast at the lower end of its prior outlook for earnings of $2.25 to $2.45 per share. It did not give details.

Safeway, the No. 2 chain behind Kroger Co (KR.N), also operates Vons and Dominick's stores.

In June, Safeway said it was selling its Canadian assets to grocery chain Sobeys in a $5.7 billion deal and use the proceeds to pay down debt and buy back shares.

In April, California-based Safeway took Blackhawk Network Holdings Inc (HAWK.O) public and continues to exercise control over the company it created in 2001.

Safeway shares added 13 cents to $24.78 in early trading.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Jeffrey Benkoe)

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