Safeway Misses by 7 Cents; Shares Down 8%

Safeway Inc.’s (SWY) share price tumbled about 8% today as the supermarket chain missed estimates in its first quarter.

Earnings for the quarter came in at 34 cents per share, which fell short of the consensus by 7 cents.

Sales dipped 7.6% to $9.2 billion, hurt by the shift in holiday sales, decrease in fuel margins and a fall in the Canadian currency exchange rate.

The company reduced its full-year earnings guidance to between $2.10 and $2.30 per share from its prior view of $2.34 to $2.44.

One analyst out of 14 pulled back on expectations in the last month, bringing the 2009 consensus down by a penny to $2.26 per share.

Meanwhile, Safeway increased its quarterly dividend to 10 cents per share.

Safeway, a Zacks #3 Rank ("Hold"), is currently moving on abnormally heavy volume of 8 million, well ahead of the daily average of 3.8 million.

Read the full analyst report on SWY