Safeway Earnings: Here’s Why the Stock is Rising Now

Safeway Inc. (NYSE:SWY) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 3.73%.

Safeway Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 2% to $0.51 in the quarter versus EPS of $0.50 in the year-earlier quarter.

Revenue: Decreased 16.28% to $8.7 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Safeway Inc. reported adjusted EPS income of $0.51 per share. By that measure, the company met the mean analyst estimate of $0.51. It missed the average revenue estimate of $10.45 billion.

Quoting Management: “We are pleased with the significant milestones we achieved this quarter,” said Robert Edwards, President and CEO. “The substantial cash proceeds we expect to receive from the sale of our Canadian operations combined with the completion of the Blackhawk IPO will allow us to broadly enhance stakeholder value. At the same time, our continuing U.S. operations demonstrated strong year over year earnings growth in the second quarter, and we continue to gain share in our U.S. markets with a 20 basis-point improvement in the supermarket channel and a two basis-point improvement in the all outlet channel.”

Key Stats (on next page)…

Revenue decreased 12.99% from $9.99 billion in the previous quarter. EPS increased 45.71% from $0.35 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.48 to a profit $0.46. For the current year, the average estimate has moved up from a profit of $2.29 to a profit of $2.31 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)