Updated from 8:55 a.m. EST

Albertson's ( ABS), its fourth quarter torpedoed by a grocery workers' walkout, said the strike's recent resolution won't spare its first quarter more pain.

In a conference call with analysts, the company said the strike will reduce first-quarter earnings by 14 cents a share, a pronouncement that recently sent its shares down 28 cents, or 1.2%, at $23.84. They are slightly off their 52-week high of $25.33 reached on Feb. 27.

Boise, Idaho-based Albertson's earned $130 million, or 35 cents a share, in the fourth quarter, compared with a profit of $205 million, or 54 cents a share, a year ago. Earnings in the latest quarter were cut $90 million, or 24 cents a share, by the 70,000-person-strong grocery workers' strike in California, which started in October and was resolved about two weeks ago.

Total sales in the quarter fell to $8.6 billion from $9.1 billion a year ago. Albertson's said the strike cut sales in the most recent quarter by about $700 million. Same-store sales in the period fell 6.5%. The company said that excluding the strike, same-store sales would have risen 1.2%.

Gross margin in the quarter was 27.8%, down 70 basis points from the previous-year's gross margin of 28.5%. Gross profit was $2.4 billion in the quarter, cut by $298 million, or 109 basis points, from the strike. Gross profit a year ago was $2.6 billion.

The company said in a statement that "2003 was a challenging year that was affected by a recovering U.S. economy, a more competitive marketplace for food and drug retailers as well as a labor dispute of historic proportions."

Albertson's said that it exceeded its planned targets for the fourth quarter, when excluding the Southern California stores involved in the labor dispute. The company believes that if the dispute had never occurred, the 276 Southern California stores involved in the labor dispute would have at least met forecasted targets in both the third and fourth quarters of 2003.

The company's first-quarter earnings will be reduced 8 cents a share by expenses related to the strike settlement and the funding of a trust for worker welfare. It spent the conference call mapping out ways it will woo back customers who might have shopped at other grocery-store and drug-store chains during the strike, citing a loyalty card program, which began on Feb. 18.

"We plan to be very aggressive in investing in our Southern California business to get loyal customers back from other stores and get new customers," the company said.

The company said, however, that "it's anybody's call" on how much money it must spend to get customers back.

The company said its employees have 10 days to return to work from the date the strike was resolved and that it does not yet know if all its previous employees will be returning. The first employees came back March 2. The company had to hire 20,000 replacement workers during the strike.

The strike also hurt Albertson's competitors Kroger ( KR) and Safeway ( SWY). Albertson's had said on Dec. 5 that the strike contributed to third-quarter earnings plunging 47%.

The company also said that, due to cost reductions from the renegotiated labor contracts, it will invest in supply-chain savings and other cost savings programs to drive sales.

The company also announced that it beefed up its multiyear cost savings plan, which was started in 2001. Albertson's said it is above plan to lower costs by $750 million before the end of 2004. So far, $609 million has been saved in the program.

Albertson's sees full-year fiscal 2004 earnings coming in at $1.30 to $1.40 a share, which includes the known costs of the labor dispute during the first quarter and expected costs of recovery in Southern California. Analysts have forecast earnings of $1.66 a share in 2004.