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Kroger Climbs on Earnings Beat

The grocer also raises guidance.
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shares jumped Tuesday after the grocery chain operator beat Wall Street's third-quarter earnings expectations and raised its guidance.

For the quarter ended Nov. 4, the Cincinnati-based company earned $214.7 million, or 30 cents a share, up from $185.4 million, or 25 cents a share, a year earlier. Analysts polled by Thomson First Call expected earnings of 28 cents a share for the latest quarter.

Total sales increased 4.8% to $14.7 billion, slightly shy of analysts' average forecast of $14.86 billion. Same-store sales increased 4.9% including fuel and 5.3% without fuel.

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The company said it now expects identical supermarket sales growth to exceed 5% for the fourth quarter, excluding fuel. Kroger projects fiscal-year earnings-per-share growth of 8% to 10%, up from earlier guidance of 6% to 8%.

Based on last year's earnings of $1.31 a share, the new forecast implies a profit of $1.41 to $1.44 a share for the current year. Wall Street expects earnings $1.45 a share.

For the fiscal year ending in early 2008, Kroger confirmed its EPS growth forecast of 6% to 8%.

The company operates 473 supermarkets and multidepartment stores in 31 states under names including Kroger, Ralphs, Fred Meyer and Food 4 Less. Kroger also operates 774 convenience stores, 418 fine jewelry stores, 619 supermarket fuel centers and 42 food processing plants.

Shares of Kroger recently were up $1.49, or 6.7%, to $23.82.