UPDATE 1-UniFirst posts Q3 profit above Street view; shares rise
(Recasts; adds details, share movement)
July 2 (Reuters) - Uniform and protective clothing maker UniFirst Corp (UNF.N: Cotización) posted a higher-than-expected 24 percent rise in third-quarter profit, boosted by higher revenue at its core laundry business, sending its shares up about 13 percent.
UniFirst, which rents, launders and sells industrial uniforms, protective clothing, as well as non-garment items such as floor mats, has bucked sluggish uniform rental trends by focusing on providing higher-margin laundry services.
The Wilmington, Massachusetts-based company reported net income of $16.9 million, or 87 cents a share, up from $13.7 million, or 71 cents a share, a year earlier.
Revenue for UniFirst, which also decontaminates and cleans garments that have been exposed to radioactive materials, rose nearly 11 percent to $254.6 million for the quarter ended May 31, 2008.
Analysts on average expected the company, which competes with Cintas (CTAS.O: Cotización) and G&K Services GKSR.O, to earn 77 cents a share, before special items, on revenue of $252.7 million, according to Reuters Estimates.
Revenue from UniFirst's core laundry business, which represents about 90 percent of its consolidated revenue, increased 11.5 percent in the third quarter from the year-ago period.
Shares of UniFirst, whose customers include oil major BP (BP.L: Cotización), supermarket operator Safeway SWY.N and cable TV firm Comcast (CMCSA.O: Cotización), rose to a high of $50.44 before paring some gains to trade up $5.17 at $49.84 Wednesday morning on the New York Stock Exchange. (Reporting by Dhanya Skariachan in Bangalore; Editing by Bernard Orr)
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