Federated Posts Big Beat

Federated(FD Quote), the largest U.S. department store operator, beat earnings estimates for its first quarter, boosted by strong demand for spring fashions.

The company, which operates Macy's and Bloomingdale's, earned $123 million for the quarter, or 71 cents a share, up from $97 million, or 53 cents a share, in the same quarter last year. Analysts were expecting earnings of only 67 cents a share, according to consensus estimates reported by Thomson First Call.

Last week, Federated raised its first-quarter earnings outlook to a 65 cents to 70 cents per share range from 45 cents to 50 cents per share.

Shares of Federated were recently trading up 40 cents, or 0.7%, to $64.35 in premarket trading.

"We obviously were very pleased with the quarter's results and our above-expectations sales performance, especially since these comparisons are against a strong first quarter last year," the company said.

Sales for the quarter totaled $3.605 billion, up 2.5% from last year's $3.517 billion. On a same-store basis, Federated's year-to-date sales were up 2.6%. It opened no new stores in the first quarter of 2005.

Looking ahead, Federated expects second-quarter earnings in a range from 80 cents to 85 cents a share. The forecast was consistent with Wall Street's expectations, with analysts predicting earnings of 83 cents a share.

Earlier this year, Federated agreed to buy its chief rival, May Department Stores (MAY Quote), in an $11 billion deal that is still pending. May, which operates Lord & Taylor and Filene's, posted a 46% drop in first-quarter earnings late Tuesday, continuing its struggles of late.

May earned $41 million for the quarter, or 13 cents a share. That compares with $76 million, or 24 cents a share, a year earlier. Its sales rose 13.7% to $3.37 billion.