May 4, 2010 / 5:31 PM / in 7 years

UPDATE 1-Uni-Select profit falls on stonger Canadian dollar

* Q1 EPS C$0.39 vs C$0.41 a year earlier

* Adjusted EPS C$0.43 vs expected C$0.44

* Company puts focus on pursuing U.S. acquisitions

TORONTO, May 4 (Reuters) -Uni-Select Inc UNS.TO, a Canadian distributor of automotive replacement parts, equipment and tools, reported a drop in quarterly profit on Tuesday that it said was largely due to the appreciation of the Canadian dollar versus the U.S. dollar.

Uni-Select’s net earnings fell to C$7.6 million ($7.5 million), or 39 Canadian cents a share, from C$8 million, or 41 Canadian cents, a year earlier.

“It is notable that the exchange rate variation had an impact of almost C$1 million on results for the quarter; excluding this item, results for the quarter would have exceeded those of 2009,” the company said in a release.

Adjusted earnings per share from continuing operations were 43 Canadian cents.

Analysts had expected, on average, adjusted earnings of 44 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Revenue at Uni-Select, which operates in Canada and the United States, was down 12.5 percent at C$307 million.

The stronger Canadian dollar was responsible for C$38.6 million of the the drop, the company said. The closure of corporate stores during previous quarters decreased sales by a further C$7.6 million.

“These results, while they include a nonrecurring item, are below our expectations,” Richard Roy, chief executive of Uni-Select, said in a statement.

“We maintain our focus and efforts in order to pursue our growth through acquisitions in the United States where development opportunities remain due to relative market fragmentation,” he said.

Roy added that management is confident that its growth strategy will improve profitability.

Excluding the effects of the foreign exchange, sales for the company’s U.S. operations were C$193.2 million, up 0.9 percent from a year earlier. Its Canadian operations recorded a 0.2 percent decrease to C$113.8 million.

The company’s shares were down 27 Canadian cents at C$27.40 on the Toronto Stock Exchange on Tuesday afternoon.

$1=$1.02 Canadian Reporting by John McCrank; editing by Peter Galloway

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