Safeway Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Safeway (NYSE:SWY) will unveil its latest earnings on Thursday, October 11, 2012. Safeway is a retail supermarket chain in North America. As a food and drug retailer, the company, with its subsidiaries, operates stores that offer a range of grocery products, general merchandise and specialty departments like pharmacies and coffee shops. It also owns and operates distribution, manufacturing and food-processing facilities.

Safeway Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 43 cents per share, a rise of 13.2% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 45 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 43 cents during the last month. For the year, analysts are projecting profit of $1.96 per share, a rise of 13.3% from last year.

Past Earnings Performance: The company topped forecasts last quarter after being in line with estimates the quarter prior. In the second quarter, it reported net income of 50 cents per share versus a mean estimate of 49 cents. Two quarters ago, it reported profit of 30 cents per share.

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A Look Back: In the second quarter, profit fell 15.8% to $122.7 million (51 cents a share) from $145.8 million (41 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 1.9% to $10.39 billion from $10.2 billion.

Stock Price Performance: Between July 12, 2012 and October 5, 2012, the stock price rose 43 cents (2.7%), from $15.73 to $16.16. The stock price saw one of its best stretches over the last year between January 12, 2012 and January 25, 2012, when shares rose for nine straight days, increasing 11.4% (+$2.35) over that span. It saw one of its worst periods between April 20, 2012 and May 9, 2012 when shares fell for 14 straight days, dropping 13.6% (-$3) over that span.

Analyst Ratings: With five analysts rating the stock as a buy, four rating it as a sell and eight rating it as a hold, there are indications of a bullish outlook.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 7.1% in the third quarter of the last fiscal year, 6.2% in the fourth quarter of the last fiscal year and 2.4% in the first quarter before increasing again in the second quarter.

There has enjoyed solid performance recently heading into this earnings announcement with profit rising by a year-over-year average of 43.6% for the last four quarters.

Wall St. Revenue Expectations: Analysts are projecting a rise of 1.8% in revenue from the year-earlier quarter to $10.24 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.92 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company improved this liquidity measure from 0.88 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 6.4% to $4.11 billion while liabilities rose by 1.1% to $4.46 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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