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George Weston boosts Q3 profits with acquisitions

George Weston boosts Q3 profits with acquisitions

George Weston (TSE:WN) said Tuesday its third quarter profits rose 50 percent, largely on acquisitions.

For the three months ended October 8, the grocery chain owner posted net earnings of $264 million, or $1.94 per share, up 50 percent over $176 million, or $1.26 per share, a year ago.

Adjusted for certain one-time items, including the forward sale of 9.6 million shares of Loblaw stock, as well as other restructuring and currency translation charges, earnings rose 14.3 percent to $1.44 per share.

Revenues hiked over two percent to $10.06 billion, from $9.83 billion in the same period last year.

Analysts polled by Bloomberg had expected earnings of $1.43 per share, on $10.1 billion in sales.

The company operates in two segments: its namesake Weston Foods business, which acquired Keystone Bakery Holdings in the third quarter of 2010, and ACE Bakery in the fourth quarter of 2010, and its Loblaw business, in which it holds about a 63 percent interest.

Sales at Weston Foods increased little more than ten percent to $545 million, as volume grew six percent. The company's acquisition of Keystone made up ten percent of sales growth, while its ACE buy added 7.5 percent to growth in sales.

Total sales at Loblaw increased two percent to $9.73 billion, with comparable store sales, or those locations open at least one year, rising 1.3 percent, compared to a 0.4 percent decline a year ago. The company said sales growth in food was moderate, while sales in drugstores declined marginally.

However, overall apparel sales increased moderately, and gas bar sales posted strong increases. Additionally, higher credit card transaction values under the Loblaw Financial Services banner resulted in higher interchange fee income.

In Toronto, George Weston shares rose 0.18 percent to $66.01, as of 11:19 am EDT.

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