Kroger Near 6-Year High

The stock of the nation's largest traditional grocery chain hit its highest level since January, 2001 as the company reported earnings above Wall Street's expectations.

Kroger said its third-quarter profit rose 16% as established stores turned in a solid performance.

Net income for the quarter ended Nov. 4 climbed to $214.7 million, or 30 cents a share, compared with net income of $185.4 million, or 25 cents a share, last year.

That was ahead of analyst's consensus of 28 cents a share, according to Thomson Financial.

Revenue gained 5% to $14.7 billion, from $14.02 billion last year. Analysts predicted revenue of $14.86 billion.

Same-store sales, or sales in stores open at least one year, increased 4.9% including gasoline sales and 5.3% excluding fuel sales.

Kroger operates nearly 2,500 supermarkets under such banners as Kroger, Ralphs, Fred Meyer and Smith's. It also operates 774 convenience stores.

The company expects same-store sales growth to be better than 5% in the fourth quarter, excluding gasoline. Kroger raised its estimate for earnings a share growth to 8 percent to 10 percent, adding that it is "striving" for the upper end of that range based on the latest results. The grocer had previously estimated per share growth at 6% to 8%.

The new range implies earnings between $1.41 and $1.44, compared with year-ago earnings of $1.31 a share. Analysts expect $1.45 a share.

For fiscal 2007, the company sees earnings per share growth between 6% and 8%.