Safeway Earnings Soar Past Expectations; Shares Jump

PLEASANTON (CBS/AP) -- Grocery store operator Safeway's net income jumped 13 percent in the fourth quarter helped by higher gift and prepaid card revenue and a legal settlement.

Shares spiked 15 percent in morning trading on the better-than-expected results.

The Pleasanton-based company, which operates Safeway and other grocery chains, says its customer loyalty program, "Just for U," is driving market share gains and profits.

Net income rose 13 percent to $244 million, or $1.02 per share. Excluding a benefit from a legal settlement, it earned 94 cents per share. Analysts expected 76 cents per share.

A 26 percent decline in the number of Safeway shares helped make the value of each remaining share higher.

Revenue edged up 1 percent to $13.77 billion from $13.6 billion last year. Analysts expected $13.69 billion.

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