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Strong Showing from Supervalu

Shares surge after the grocer beats earnings targets and raises guidance.
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Investors rang up shares of



Thursday after the grocer posted a higher-than-expected fourth-quarter profit and raised its forecast for the current year.

The stock was up $2.93, or 7.3%, to $42.77 in recent trading.

For the quarter ended Feb. 24, the Eden Prairie, Minn.-based company earned $119 million, or 57 cents a share, up from $6 million, or 4 cents a share, a year ago.

The results included a charge from the sale of 18 Scott's Food & Pharmacy stores in northeast Indiana to


(KR) - Get Free Report

. The deal, announced Thursday, cut earnings by 11 cents a share.

Excluding the charge, Supervalu would have earned 68 cents a share. Analysts polled by Thomson Financial expected earnings of 63 cents a share.

Sales surged to $10.3 billion from $4.64 billion a year earlier, boosted by the company's June purchase of Albertson's. Wall Street expected revenue of $10.22 billion.

Sales in the retail food segment totaled $8.2 billion, up from $2.5 billion a year earlier, due to the Albertson's acquisition. Identical-store sales, which are calculated as if the newly acquired operations were in the store base for more than a year, increased 1.4%.

Supervalu raised its fiscal 2008 guidance to $2.68 to $2.87 a share from its previous forecast of $2.58 to $2.77. The new projection includes transaction-related costs of 16 cents to 20 cents a share.

Wall Street predicts earnings of $2.66 a share for the current fiscal year.

Separately, Kroger said that it intends to continue operations of the newly acquired Indiana stores under the Scott's banner. Financial terms of the deal, which is expected to close later this year, were not disclosed.

Shares of Kroger were up 41 cents, or 1.4%, to $29.81.