* EPS ex items C$0.74 vs C$0.66
* Rev up 2.2 pct at C$7.18 bln
* Shares up 1 percent at C$74.39
(Adds company comments)
TORONTO, May 11 (Reuters) - George Weston Ltd (WN.TO) said on Tuesday quarterly profit rose more than expected after a big gain on an asset sale and other items were stripped out of its year-earlier results, pushing up shares of the Canadian food company.
Weston, North America’s largest baked goods maker and owner of Loblaw (L.TO), Canada’s No. 1 grocery store operator, said net income dropped to C$42 million ($40.9 million), or 25 Canadian cents a share for the three months ended March 27, from C$863 million, or C$6.61, a year earlier.
The 2009 results included a C$921 million gain from the sale of the U.S. fresh bakery business to Grupo Bimbo (BIMBOA.MX), as well as foreign currency conversions.
Excluding a number of items, the company earned 74 Canadian cents a share, above the average analyst estimate of 66 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Revenue for the quarter rose 2.2 percent to C$7.18 billion, slightly ahead of the C$7.1 billion which analysts were expecting.
“The first quarter once again saw noise in reported results that makes it somewhat challenging to get at the underlying operating performance of the business,” Bob Vaux, the company’s chief financial officer, said on a conference call.
“There were a number of items that affected the year-over-year comparative results. ... Excluding these items earnings were still well ahead of last year.”
The gain from the sale of the bakery business, coupled with the earlier sale of its Neilson Dairy division, has given the company a hefty war chest of cash.
Analysts have a long list of options for the company, including taking Loblaw private, making grocery industry acquisitions in Western Canada, and paying a special dividend to shareholders.
But company officials, which said they have looked at a number of opportunities in Canada and the United States, said they were in no hurry to spend the money.
“We have looked at a lot of things, but we have not been excited by any of them,” said W. Galen Weston, chairman and president.
“The half a dozen things that we have taken seriously have either been sold at enormous prices or the other options have not worked out because there has been very little synergies.”
Last week, the company said it planned to buy back some 6.5 million, or about 5 percent, of the outstanding shares.
Shares of Weston rose about 1 percent to C$74.37 on the Toronto Stock Exchange.
$1=$1.02 Canadian Reporting by Scott Anderson