Casey’s General Stores 1st-quarter profit slips on fees, higher operating expenses

Casey’s 1Q profit falls on fees, expenses

ANKENY, Iowa — Casey’s General Stores Inc., which is fending off a hostile takeover bid, said Tuesday that its fiscal first-quarter profit fell 16 percent on fees related to evaluating the takeover offer and higher operating expenses. Its revenue rose 14 percent.

The convenience store operator reported net income of $37.3 million, or 73 cents per share, for the three months ended July 31, down from $44.2 million, or 87 cents per share, a year earlier.

Analysts polled by Thomson Reuters, whose estimates usually take out one-time items, forecast earnings of 81 cents per share.

Casey’s said it spent about $6.2 million on legal and advisory fees related to assessing Alimentation Couche-Tard Inc.’s takeover offer.

Last week the Canadian convenience-store operator raised its bid for Casey’s to $38.50 per share in cash from $36.75. Casey’s turned down the increased offer on Tuesday and said it received a preliminary proposal of $40 per share in cash from an unnamed third party.

While the company believes it is worth more than the $40 per share, Casey’s said it is willing to enter talks with the suitor to see if a potential deal can be worked out.

Casey’s revenue rose 14 percent to $1.36 billion from $1.19 billion. Wall Street’s average estimate was for revenue of $1.37 billion.

The company’s operating expenses grew to $152.4 million from $132.4 million.

Casey’s said its quarterly dividend increased 35 percent to 13.5 cents. The dividend will be paid on Nov. 15 to shareholders of record Nov. 1.

Its shares rose $2.71, or 7 percent, to $41.61 in midday trading.