NEW YORK (

TheStreet

) -- Is

Safeway

(SWY)

safe? One might not think so, as the company today posted a 36% plunge in its third-quarter profit.

But despite this decline, shares of the company have popped by more than 7% to $22.95 in early morning trading, as the results managed to surpass Wall Street's expectations.

The grocery chain said earnings tumbled to $128.8 million, or 31 cents a share, from $199.7 million, or 46 cents, in the year-ago period. Analysts expected the company to earn 29 cents a share.

Safeway was hit hard by shoppers who are cutting back, as sales fell 7% to $9.5 billion from $10.2 billion. The company is also struggling due to price cuts.

Management reaffirmed its full-year earnings in the range of $1.70 to $1.90 a share.

Rival

Supervalu

(SVU)

will report its earnings results on Oct. 20.

-- Reported by Jeanine Poggi in New York

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