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J.C. Penney beats Street
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May 15, 1998: 12:00 p.m. ET
Department store chain posts 25 percent gain, edging out analysts' estimates
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NEW YORK (CNNfn) - Cost-cutting measures late last year and continued growth in merchandise sales helped J.C. Penney on Friday post first-quarter net income of $174 million, a 25 percent jump over last year.
The Dallas-based department store chain earned 64 cents per diluted share for the quarter ended May 2, compared with net income of $139 million, or 53 cents per share, in the year-ago quarter.
Wall Street had expected earnings of 62 cents per share, according to First Call.
J.C. Penney's revenues reached $7 billion, up from $6.7 billion last year.
"We are pleased with operating results for the first quarter and the positive trends affecting our business," said James E. Oesterreicher, the company's chairman and chief executive officer. "J.C. Penney stores and catalog posted strong operating profit, building on the positive performance in the final quarter of 1997."
Last year, J.C. Penney took a charge of $225 million, or 50 cents per share, against fourth-quarter earnings to cover the costs of closing 75 underperforming stores, integrating the company's acquisition of Eckerd drugstores and layoffs of more than 3,200 workers.
The measures were designed to improve J.C. Penney's financial performance and keep the company competitive.
Oesterreicher said Friday that Eckerd drugstore sales were strong throughout the first quarter.
"We believe that Eckerd operating profit will continue to build as the year progresses," he said. "Going forward, our goal is continued improvement in our earnings trend as a result of strategic initiatives recently announced and being implemented.''
Operating profit grew more than 44 percent to $234 million in the first quarter compared with $162 million in the same period a year ago. 
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J.C. Penney
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