UK Grocer Tesco's H1 Profit Up 1.3 Pct

ROBERT BARR

LONDON (AP) — Tesco PLC, the world's fourth-largest retailer, on Tuesday reported a 1.3 percent rise in first half profits, thanks to strong revenue growth in Asia, although U.S. operations continued to lose money.

For the 26 weeks ending Aug. 29, the company reported a net profit of 1.027 billion pounds ($1.64 billion), up from 1.016 billion pounds in the comparable period a year earlier.

Revenue rose 9.2 percent to 27.78 billion pounds.

Underlying pretax profit was up 8.6 percent to 1.57 billion pounds, above analysts' forecast of 1.5 billion, said Freddie George, analyst and Seymour Pierce.

The company said it would raise its interim dividend by 9 percent to 3.89 pence.

Despite the news, Tesco shares were down 1.1 percent at 387 pence in early trading on the London Stock Exchange.

"Tesco's results look promising, but scratch beneath the surface and cracks have started to appear," said Manoj Ladwa, senior trader at ETX Capital. "Despite a net first half profit in excess of 1 billion and a hike in their dividend, the much-lauded U.S. expansion has yet to prove profitable."