Sears Climbs After Profit Forecasts Beat Analysts’ Estimates
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By Lauren Coleman-Lochner and Heather Burke
Jan. 8 (Bloomberg) -- Sears Holdings Corp., the largest U.S. department-store company, jumped the most in five years after its profit forecasts beat some analysts’ estimates.
The retailer said it expects fourth-quarter earnings per share of $2.44 to $3.09, excluding one-time items that may include store closings, severance costs and hedging transactions. Seven analysts predicted $1.92, on average, in a Bloomberg survey.
The company also forecast full-year net income of $1.27 to $1.90 a share today. Seven analysts projected 53 cents.
Sears last month withdrew its August forecast of an increase in earnings before interest, taxes, depreciation and amortization during the second half of the year, citing a deteriorating U.S. economy. The projection had been based on little-changed same- store sales or a small decline.
The company had fourth-quarter net income of $3.17 a share a year ago.
Sears rose as much as $9.25, or 23 percent, to $49.80 in Nasdaq Stock Market composite trading, the steepest intraday gain since January 2004. They advanced 16 percent to $46.99 as of 10:27 a.m. New York time. The shares lost 62 percent of their value in 2008.
Sears said it expects to end the year through January with about $1.3 billion in cash. Its Canadian stores are to account for more than half of that. Sears said last week it will suspend matching contributions to employee-retirement plans this month.
December sales at stores open at least a year dropped 7.3 percent, and comparable-store sales decreased 13 percent at the Sears chain, hurt by weaker consumer demand and the slumping housing market, Hoffman Estates, Illinois-based Sears said. Revenue on that basis fell 1.1 percent at Kmart locations, which the company said benefited from increased layaway purchases.
Chairman Edward Lampert hasn’t posted a same-store sales increase since he combined the Sears and Kmart chains in 2005.
To contact the reporters on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net; Heather Burke in New York at hburke2@bloomberg.net.
Last Updated: January 8, 2009 10:29 EST
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Also during the fourth quarter, we repurchased 2.9 million common shares at a total cost of $119 million (or $40.82 per share) under our share repurchase program. As of January 7, 2009 we had remaining authorization to repurchase $506 million of common shares under the previously approved programs.
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