George Weston raises dividend as adjusted earnings rise

Tue Nov 20, 2012 9:36am EST
 

(Reuters) - George Weston Ltd WN.TO, the Canadian food producer and distributor that owns the Loblaw Cos Ltd (L.TO: Quote) grocery chain, boosted its dividend on Tuesday as a strong performance by its bakery division helped lift adjusted earnings.

But the company cut its 2012 outlook, saying it expects sales in its bakery division to be slightly lower than 2011. Previously, it had said it expected sales in line with 2011.

Results were held back by the contribution from Loblaw, which last week also raised its dividend while reporting lower quarterly profit as sales at established stores slipped.

In George Weston's other segment, baked goods producer Weston Foods, operating income rose thanks to lower commodity costs and productivity improvements.

The bakery division, which employees more than 6,000 workers at more than 40 facilities in North America, sells products under several brands, including Wonder, D'Italiano and Ace Bakery.

The results were also boosted by lower income tax expenses, which fell 9.8 percent to C$101 million in the third quarter ended October 6. Net earnings fell to C$243 million ($244 million), or C$1.07 a diluted share, from C$351 million, or C$1.93, a year earlier.

Excluding a restructuring charge and other items, adjusted earnings rose to C$1.49 per basic share, from C$1.44. Analysts, on average, had been expecting earnings of C$1.41 a share, according to Thomson Reuters I/B/E/S.

The company raised its dividend by 2 Canadian cents to 38 Canadian cents a share.

Revenue slipped 1.0 percent to C$10.16 billion, shy of consensus at C$10.20 billion.

($1 = $1.00 Canadian)

(Reporting by Allison Martell; Editing by Theodore d'Afflisio)