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Sears beats street in 2Q
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July 23, 1998: 10:12 a.m. ET
Retailer posts profit of 80 cents a share; despite hint of turnaround, stock down
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NEW YORK (CNNfn) - Sears Roebuck & Co., the nation's number two retailer, after Wal-Mart, posted slightly better-than-expected second-quarter earnings Thursday, giving a glimmer of hope to investors waiting for signs that the company's turnaround efforts are in earnest.
Sears, whose specialty lines include automotive parts, home furnishing, hardware and installation services, said net income in the second quarter, excluding several items, rose 2.25 percent to $318 million, or 80 cents a diluted share, from $311 million, or 78 cents a share, a year earlier. Revenue climbed 5.6 percent to $10.25 billion from $9.7 billion.
Wall Street analysts surveyed by First Call had forecast earnings of 78 cents a share.
Under Chief Executive Officer Arthur Martinez, Sears has been immersed in a closely-watched six-year effort to improve profitability. When Martinez took the helm in 1992, the retailer's 833 department stores were not making money.
Since then, the turnaround has stumbled on bad debt write-offs and debt collection problems associated in part with the 24 million Sears credit cards the company issued between 1993 and 1996.
Recently, Sears has been scaling back efforts to open new credit accounts. In the latest quarter, Sears said its provision for uncollectible accounts rose to $355 million from $287 million in the year-ago period.
Shares of Sears (S) were down 11/16 at 56 in early trading Thursday on the New York Stock Exchange.
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Sears
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