Supervalu Turns A Profit; Stock Leaps Then Falls

Months after selling off a huge chunk of its business, Supervalu’s second-quarter profits and revenue both beat analyst expectations.

Shares of Supervalu, Inc., leapt 6 percent in premarket trading Thursday morning after the company announced its second-quarter results, but its stock price slid later on Thursday.
 
The Eden Prairie-based grocery retailer announced that net earnings for the second quarter, which ended September 7, totaled $40 million, or $0.15 per share, a huge improvement from a $111 million loss, or a loss of $0.52 per share, during the same period in 2012.
 
Earnings per share were $0.02 higher than what analysts polled by Thomson Reuters had expected.
 
Supervalu returned to profitability in the first quarter of this year with net earnings of $85 million, following several quarters of profit losses.
 
Revenue, meanwhile, totaled $3.95 billion, up slightly from $3.94 billion in the second quarter of 2012. Second-quarter revenue was just over analysts’ projections of $3.88 billion. (The second-quarter 2012 figures refer to “continuing operations,” which exclude profits from businesses it recently sold.)
 
Supervalu was Minnesota’s fourth-largest public company based on revenue until it sold off five grocery chains, including nearly 900 supermarkets, in a $3.3 billion deal that closed in March.
 
Although shares of Supervalu’s stock climbed during premarket trading, they later took a dive, trading down about 3.33 percent at $8.12 late Thursday morning.
 
Supervalu’s deal to sell five grocery chains was first announced in January, and it led to the appointment of Sam Duncan as CEO in February; he replaced Wayne Sales. As part of the deal, the company sold 877 Albertsons, Acme, Jewel-Osco, Shaw’s, and Star Market stores, as well as the associated Osco and Sav-on in-store pharmacies, to an investor consortium led by New York-based private investment firm Cerberus Capital Management L.P.