Pension Costs Crimp J.C. Penney Earnings

Another department store takes a hit -- and this time it's J.C. Penney(JCP Quote), which posted a 79% plummet in first-quarter earnings, hurt by a hefty pension expense.

Shares of the company tumbled 4% to $25.69 in pre-market trading.

The mid-tier department store earned $25 million, or 11 cents a share, compared with $120 million, or 54 cents, a year ago. Analysts expected a profit of 10 cents.

Sales dropped 6% to $3.88 billion from $4.13 billion, while same-store sales declined 7.5% on softness in the fine jewelry business.

Chairman and Chief Executive Myron E. Ullman III warned that the company still expects soft consumer spending and mall traffic for the rest of the year and predicts full-year earnings in the range of 50 cents to 65 cents a share. Analysts had expected a profit of 76 cents.

J.C. Penney said it anticipates a loss in the second quarter of 15 cents to 25 cents per share.

Earlier this week, rival Macy's(M Quote) also posted a disappointing loss and annoucned that sales had reached a four-year low. Kohl's(KSS Quote) reported a 10% drop in first-quarter earnings, but raised its full-year guidance and saw positive sales numbers.

High-end department store Nordstrom(JWN Quote) saw a 32% decline, but also boosted full-year guidance in anticipation of higher gross profit and an increase in credit-card revenue.