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Sears tops 3Q forecasts
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October 19, 2000: 11:08 a.m. ET
Strong credit results, share buybacks help lift profit for No. 2 retailer
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NEW YORK (CNNfn) - Sears Roebuck & Co., the nation's second-largest retailer, edged past earnings forecasts for the third quarter, lifted by credit card operations and share repurchases.
The company earned $278 million, or 81 cents a diluted share, 1 cent a share better than the forecast of analysts surveyed by First Call. A year earlier, the company posted net income of $236 million, or 62 cents a share, but that included a special charge for staff reductions. Excluding that charge, year-ago earnings came to 69 cents a share.
Revenue in the latest quarter rose 5 percent to $9.6 billion from $9.2 billion, making Sears the second-largest retailer behind only Wal-Mart Stores Inc.
 Sears' strong earnings come at a time when many retailers are experiencing softer sales because of decreased consumer spending, higher oil and gas prices and rising interest rates.
"Our credit business contributed very strong growth in operating income," CEO Alan Lacy said. "We are pleased with the quality of our credit portfolio and our ongoing productivity improvements."
The introduction of the Sears Gold MasterCard in July and Sears Premiere Card a year ago helped the retailer post credit gains in the quarter. Sears reported a 5 percent increase in its reserve for delinquent credit accounts to $200 million from $190 million.
Sales of appliances, electronics, lawn and garden and sporting goods increased as did sales of footwear, fine jewelry, and cosmetics and fragrances. But softer apparel sales offset some of those gains, the company said.
During a conference call with analysts Thursday, Sears said it expects low- to mid-teens earnings per share growth for the full year while the costs of launching the new MasterCard in July will hurt credit profits in the fourth quarter.
New store openings and sales growth helped Sears Canada revenue jump 6.9 percent to $1.02 billion in the third quarter.
Shares of Sears (S: Research, Estimates) gained 34 cents, or 1 percent, to $33.54 in trading Thursday. 
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Sears
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