March 11, 2008 / 1:56 PM / 10 years ago

Sobeys, lower tax boost Empire's profit 52 percent

TORONTO (Reuters) - Empire Co Ltd (EMPa.TO) said on Tuesday third-quarter earnings rose 52 percent, helped by lower taxes and same-store results from its Sobeys unit, the No. 2 supermarket chain in Canada.

The quarterly profit increased to C$48.6 million ($49.1 million), or 74 Canadian cents per share, from C$31.9 million, or 49 Canadian cents per share, in the same period last year.

Analysts had expected a profit before exceptions of 72 Canadian cents a share, on average, according to Reuters Estimates.

Empire said revenue gained 6.7 percent to C$3.50 billion. Food sales were C$3.44 billion, compared with a restated C$3.23 billion in the year-earlier period, and real estate revenue was C$28.4 million compared with a restated C$21.8 million.

Sales at Sobeys stores open at least one year increased 2.0 percent. Empire also operates stores under such banners as IGA, Foodland and Price Chopper.

The company recorded a C$5.4-million decrease in income tax expenses related to a lower effective tax rate in the period.

Canadian supermarket operators are being hurt by widespread price chopping, a strategy launched by sector leader Loblaw (L.TO) to stave off competition from Wal-Mart Stores Inc


Paul Sobey, Empire’s chief executive, said in a statement the environment was “increasingly competitive” in both its food and real estate divisions.

Empire’s commercial and residential property operations include a 48.1 percent stake in Crombie Real Estate Investment Trust (CRR_u.TO) and a 35.7 percent holding in Genstar Development Partnership.

The Stellarton, Nova Scotia-based company’s portfolio also includes Empire Theatres Ltd, a 27.6 percent stake in Wajax Income Fund WJX_u.TO, and a joint venture with APL Oil and Gas, which has stakes in various Alberta properties.

($1=$0.99 Canadian)

Reporting by Jonathan Spicer, editing by Mario Di Simine

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