MONTVALE, N.J. -- A&P here said ongoing restructuring of its Canadian operations following protracted labor negotiations last year had an adverse effect on earnings for the fourth quarter and year ended Feb. 25.

Net earnings for the quarter were $5.8 million, compared with a net loss of $19.4 million in the fourth quarter of fiscal 1993. However, A&P said current fourth-quarter earnings included a charge of $3.7 million related to ongoing conversions of 40 regular supermarkets in Ontario to Super Fresh low-cost banners. These conversions have been key factors in labor negotiations.

Sales for the 12 weeks rose 0.3% to $2.37 billion. For the fiscal year, the company reported a net loss of $171.5 million, or $4.49 per share, on sales of $10.3 billion. This compares with net income of $4 million, or 10 cents per share, on sales of $10.4 billion the prior year.

In fiscal 1994, the company recorded pretax income of $80.5 million from U.S. operations, up 54% from 1993. However, A&P said these gains were offset by pretax losses of $66 million in Canada.

The Canadian losses included a charge of $27 million associated with three employee buyouts A&P negotiated with its Canadian labor unions.

In the third quarter, the company recorded one-time charges of $160 million, or $4.19 per share, which included a write-off of goodwill, a provision for store closings and a net reduction in deferred tax assets, as reported.

The company also said its first quarter in fiscal 1994 included a cumulative net charge of $5 million, or 13 cents per share, related to an accounting change for postemployment benefits.

According to Joseph Ronning, a securities analyst with Brown Bros. Harriman & Co., New York, "Every one of A&P's U.S. divisions showed improvement, including Atlanta, which had been one of its trouble spots. In Canada, the numbers are getting manageable. Hopefully, given the new union contracts, A&P can regain the [Canadian] market share it lost over the past two years."

During the year, A&P opened 22 new stores, remodeled or expanded 53 and closed 87. The company currently operates 1,108 stores in 23 Eastern states and Canada.

4TH-QUARTER RESULTS

Qtr Ended 2/25/95 2/26/94

Sales $2.37 billion $2.36 billion

Change +0.3%

Net Income $5.8 million ($19.4 million)

Inc/Share 15 cents (51 cents)

52 Weeks 1994 1993

Sales $10.3 billion $10.4 billion

Change -0.5%

Net Income ($171.5 million) $4million

Inc/Share ($4.49) 10 cents