By Shweta • Aug 4th, 2008 • Category: Stocks
Belgian owner of the U.S. Food Lion supermarket chain, Delhaize Group, gains in Brussels trading for a second day giving punch to economists’ expectations after reporting profits on lower tax rates. The Brussels-based company stated that after 4 1/2-year low Delhaize jumped about 5.5 percent on August 1. Second quarter net income augmented 43 percent to 116.3 million euros. Analysts expected it 92 billion earlier.
The profit and net income get support from lower tax rate in US. Among the nine companies Delhaize’s share tumbled the most in Bloomberg Europe Food Retailers Index this year. According to analysts there is nothing as much surprise except lower than expected tax rate. The shares are trading at nine times low from estimated 2008 earnings.
Sales put on 1.9 percent at U.S. stores open at least a year ago and 0.7 percent on that basis in Belgium that match July forecasts. The company repeated its July prediction that in the year its operating profits may not rise. Delhaize still has to convey superior outcome in the second half with targeted benefits from store openings, new private-label product opening and cost savings.
According to Delhaize due to optimistic decision of federal tax matters in the U.S tax rate is less than 23 percent in the second quarter which was 27 percent in year 2007.
