Safeway 3Q Net Income Falls On Severance Charges

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A Safeway delivery truck. (CBS)

A Safeway delivery truck. (CBS)

PLEASANTON (AP) – Safeway Inc. says its third-quarter net income fell 4.7 percent, as the national grocery chain paid out severance and sales weakened slightly.

Safeway now expects earnings per share and sales excluding fuel to be at the lower end of its guidance. Shares slumped in premarket trading.

The company said Thursday it earned $122.8 million or 33 cents per share, in the three months ending Sept. 11, down from $128.8 million or 31 cents per share last year. The company paid out $12 million or 2 cents per share in severance charges.

Revenue fell less than 1 percent to $9.4 billion.

Analysts expected earnings of 31 cents per share on revenue of
$9.45 billion.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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