May 12, 2009 / 1:12 PM / 9 years ago

UPDATE 2-George Weston profit boosted by bakery sale gain

* Q1 EPS C$6.61 vs C$0.91 year ago

* Revenue up 2.7 percent at C$7.02 billion

* Results include C$921 million gain from U.S. bakery sale

* Shares up 3.5 percent (Adds background, analyst comments, stock activity)

TORONTO, May 12 (Reuters) - George Weston Ltd (WN.TO) reported a higher first-quarter profit on Tuesday, as it booked a big gain from the sale of its U.S. fresh bakery business, and said it was still deciding what to do with the proceeds from its divestitures.

Weston, North America’s largest baked goods maker and owner of top Canadian supermarket chain Loblaw (L.TO), said it earned C$863 million ($745 million), or C$6.61 a share, compared with C$131 million, or 91 Canadian cents a share, a year earlier.

The results included a C$921 million gain from the sale of the U.S. fresh bakery business to Grupo Bimbo (BIMBOA.MX), which closed during the quarter, as well as foreign currency conversions.

Because the latest results included a number of other special items, Octagon Capital analyst Robert Gibson said he was still trying to evaluate the quarter.

“I have no idea what the real numbers are,” he said.

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 warchest 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 George Weston said it was in no hurry to spend the money.

“The company is continuing to assess its strategic options for the deployment of the proceeds from these divestitures,” it said in a release.

Shares of George Weston were up 3.5 percent at C$65.75 in morning trading. ($1=$1.16 Canadian) (Reporting by Scott Anderson; Editing by Lisa Von Ahn)

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