* EPS C$3.05 vs C$1.07 a year earlier
* Results include gains from sale of dairy business
* Sales rise 11.4 pct
* Shares fall 0.7 percent (Recasts and adds analyst's comments)
By Scott Anderson
TORONTO, Feb 24 (Reuters) - George Weston Ltd (WN.TO) plans to sit on a mounting cash pile and wait for the right time to invest, the company said on Tuesday after reporting a large gain from the sale of its Canadian dairy business, which boosted its quarterly results.
Weston, North America's largest baked goods maker, owns Loblaw Cos (L.TO), Canada's biggest supermarket chain. It said its profit rose to C$404 million ($323 million), or C$3.05 a basic share, in the fourth quarter from C$151 million, or C$1.07 a basic share, in the year-earlier period.
The results included a C$335 million pretax gain from the sale of Weston's Neilson Dairy division. It said a US$800 million gain from the sale of its U.S. bakery division to Mexico's Grupo Bimbo (BIMBOA.MX) would be included in its first-quarter results.
The two deals have boosted the company's cash holdings to between C$3.5 billion and C$4.0 billion. When combined with Loblaw's cash, the total rises to between C$5 billion and C$5.5 billion.
The company said it has no plans to move quickly to spend the money.
"In terms of where it has left us, it is a tremendous place to be in this environment and we do not feel pressured to re-invest it at this point in time," Bob Vaux, the company's chief financial officer, said on a conference call with analysts.
"We feel that the prudent thing to do is to be patient. We are going to take a close look at various opportunities, and when the right one comes along we are going to do it."
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.
"Weston is now in the process of making a list of desirable acquisitions. This list will then be matched up against what is available," CIBC World Markets analyst Perry Caicco wrote in a recent note to investors.
"Where the two lists intersect will dictate the next big move, and our sense is that this whole process will take at least a year to play out."
Weston reported a higher quarterly profit on Tuesday, helped by the sale of the Canadian dairy business and strong results from Loblaw.
The numbers also reflected lower than anticipated restructuring charges and income related to stock-based compensation at both Weston and Loblaw.
With the all the items stripped out, the company earned about C$1.03 a share, said Robert Gibson, an analyst at Octagon Capital.
"The numbers are bang on if you blow out all the funny stuff," Gibson said. "There is so much funny stuff it is unbelievable, and that's what is driving the earnings."
Analysts had expected Weston to earn C$1.05 a share, before exceptional items, on revenue of C$8.2 billion, according to Reuters Estimates.
Sales rose 11.4 percent to C$8.05 billion with a good portion of that coming from Loblaw.
Weston shares were off 0.6 percent at C$60.89 on the Toronto Stock Exchange at midday on Tuesday after touching a high of C$64.07 earlier in the session. ($1=$1.25 Canadian) (Reporting by Scott Anderson; Editing by Peter Galloway)