The Associated Press February 24, 2011, 9:41AM ET

Safeway returns to 4th-quarter profit

Safeway Inc. returned to a profit in the fourth quarter as price cuts and private label products helped boost its overall revenue.

The results beat Wall Street estimates, and shares of the national grocery chain gained 58 cents, or 2.6 percent, to $12.45 in morning trading.

Safeway reported net income of $229.6 million, or 62 cents per share, for the quarter ended Jan. 1. A year earlier it lost $1.61 billion, or $4.06 per share on a hefty charge for the reduced value of its assets.

The latest performance surpassed analysts' estimates for earnings of 58 cents per share.

Safeway says revenue rose 1 percent to $12.8 billion. That tops Wall Street's estimate of $12.45 billion.

Safeway, based in Pleasanton, Calif., runs 1,694 stores in the U.S. and Canada. It competes against discount retailers and traditional supermarkets.

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