By David Friend, The Canadian Press

TORONTO - George Weston Ltd. (TSX:WN) executives say they're still hunting for acquisitions, but hinted the company could be closer to making a move after months of searching for the right fit.

"Obviously a lot of values have gone up in a lot of companies, but not many in our space," chairman and president Galen Weston Sr. told analysts in a conference call on Tuesday.

"There's probably going to be stuff coming due from a number of sources. We are scouring the nation, north and south, to ensure that nothing passes us by which we feel would be appropriate for us."

North America's largest baked goods maker reported that its third-quarter net earnings dropped 52 per cent to $86 million or 56 cents per share for the quarter ended Oct. 10.

That was down from a year-ago profit of $180 million or $1.29 per share, largely because of foreign exchange losses.

Revenue totalled $9.78 billion for the quarter, down about $100 million from $9.88 billion last year. Analysts had expected revenue of $9.90 billion, according to Thomson Reuters.

Toronto-based Weston said most of its revenue came from Loblaw (TSX:L), a publicly traded grocery retailer that it controls.

Its Weston Foods sector, which includes the baking business, accounted for just $502 million of revenue, down 26 per cent from a year before.

George Weston has been selling assets in recent years in an attempt to tighten its focus. Last year, the company sold its Neilson dairy business to cheese maker Saputo (TSX:SAP) for $465 million and its U.S. fresh baked goods division to Grupo Bimbo for US$2.5 billion.

Since those sales, the company has said it would use the $3.3 billion in cash, along with $1.6 billion in short-term investments, to make an acquisition, but that it didn't feel pressure to make a play quickly.

Excluding discontinued operations following the sale of Weston Food's dairy and bottling operations at the end of last year and its U.S. fresh bread and baked goods business early this year, Weston's overall net income was $71 million or 44 cents per share in the third quarter.

George Weston said its net earnings in the most recent quarter took a beating from a 58 cent charge per common share related to unrealized foreign exchange losses.

In last year's third-quarter, spanning a 16-week period ended Oct. 4, 2008, Weston's net earnings from continuing operations was $119 million or 81 cents per share, while net earnings including discontinued operations was $180 million or $1.29 per share.

But the company said that excluding the foreign exchange losses and other items, its performance in the third quarter was "strong" compared with last year.

George Weston said it is continuing its brand and product development efforts while plant and distribution optimization, coupled with other cost reduction initiatives, remain a priority.

The company said the sale of its dairy and bottling operations in the fourth quarter of 2008 negatively impacted sales growth by about 26 per cent. Meanwhile it said foreign currency translation positively impacted sales growth by about two per cent.

George Weston shares closed unchanged at $59.10 on the Toronto Stock Exchange.