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UPDATE 2-Canadian Tire profit jumps 21 pct; hikes dividend
November 11, 2010 / 2:39 PM / 7 years ago

UPDATE 2-Canadian Tire profit jumps 21 pct; hikes dividend

* Q3 EPS C$1.27 vs C$1.04

* Same-store sales up 1.4 percent

* Increases dividend by 31 percent

* Shares up 6.8 pct at C$62.93 (Adds details, stock move)

TORONTO, Nov 11 (Reuters) - Canadian Tire (CTC.TO) (CTCa.TO) reported a 21 percent jump in net earnings on Thursday, led by a strong performance at its financial services division, and announced its first dividend increase in three years.

The forecast-topping results lifted Canadian Tire’s A shares more than 9 percent Thursday morning before they retreated slightly to C$62.93 at midday, for a gain of 6.8 percent on the Toronto Stock Exchange.

Canada’s biggest household goods and automotive supply chain reported net income of C$103.2 million, or C$1.27 a share for the third quarter. That was up from C$85.4 million, or C$1.04 a share, a year earlier.

Adjusted earnings were C$119.1 million, or C$1.46 per basic share, up 31 percent from C$91 million, or C$1.11 per basic share. Analysts had expected earnings of C$1.21 a share, according to Thomson Reuters I/B/E/S.

Adjusted pre-tax net earnings for its financial services division jumped 104 percent to C$57.4 million as it cited fewer loan writeoffs and an increase in interest earned from balances on consumer credit cards.

The company, which operates 479 Canadian Tire stores across the country as well as gasoline bars and the Mark’s Work Wearhouse clothing chain, also raised its dividend by 31 percent, the first increase in three years. The annual dividend for 2011 will be C$1.10.

Sales at stores open a year or longer, a key performance measure for retailers, rose 1.4 percent, though it said shipments were flat compared with the year-ago quarter.

Consolidated retail sales climbed 2.6 percent to C$2.5 billion, helped by growth in categories such as backyard, cleaning, exercise and outdoor recreation.

Its light auto maintenance parts in its core automotive division grew, but slower sales in heavy auto maintenance parts, auto fluids and tires offset that.

Gross operating revenue was up 1.6 percent at C$2.20 billion.

$1=$1 Canadian Reporting by Solarina Ho; editing by Rob Wilson

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