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UniFirst posts strong 3Q profit, but cuts guidance

WILMINGTON, Mass. (AP) -- UniFirst Corp. said Wednesday its fiscal third-quarter net income rose 5 percent, helped by higher revenue at its core laundry operations.

The profit was larger than Wall Street predicted, but the uniform company cut its full-year profit outlook, citing weak results at its specialty garments business. UniFirst shares fell as much as 8 percent in morning trading.

For the quarter ended May 25, UniFirst earned $28.7 million, or $1.43 per share, up from $27.5 million, or $1.37 per share, in the same quarter a year ago. Revenue rose 5 percent to $335.8 million from $320.9 million.

Analysts, on average, expected a profit of $1.37 per share on $337 million in revenue, according to FactSet.

Revenue at UniFirst's core laundry operations increased 6 percent to $297.7 million, while specialty garments revenue, which consists of the company's nuclear decontamination and cleanroom operations, fell 10 percent to $26.3 million. The decline in the specialty segment was due mainly to the absence of revenue from two large power reactor rebuild projects that ended last year, as well as a lighter than expected spring outage season, the company said.

UniFirst said it now expects to post a full-year profit of between $5.60 and $5.70 per share. It pointed to the lower-than-expected results at the specialty garments business and its current expectations for the fiscal fourth quarter.

UniFirst previously expected a profit of $5.65 to $5.80 per share. Analysts were expecting earnings of $5.69 per share, on average.

The company backed its full-year revenue to total between $1.34 billion and $1.35 billion. Analysts expect $1.35 billion.

Shares of Wilmington, Mass.-based UniFirst were down $5.47, or 5.7 percent, to $90.18 in late morning trading, after earlier dropping as low as $87.68. The stock has changed hands between $56.93 and $100.07 in the past 52 weeks.