said first-quarter earnings rose because of an accounting charge in the year-ago quarter, while revenue slipped and credit delinquencies continued to mount in its finance unit.
The department-store chain said it earned $192 million, or 60 cents a share, in the first quarter, up from $110 million, or 34 cents a share, a year ago. Analysts were forecasting earnings of 57 cents a share in the latest quarter. Before the accounting charge, Sears earned $318 million, or 99 cents a share, last year.
Overall revenue was $8.88 billion, down from $9.04 billion a year ago. In the company's merchandise sales and services segment, revenue was $7.47 billion, down from $7.65 billion a year ago.
Sears said sales fell in the post-Christmas period, causing a first-quarter loss of $23 million in its retail and related services segment. Comparable-store sales fell 6.7% in the quarter.
In credit and financial products, operating income fell 10.8% to $395 million, primarily reflecting a $100 million increase in the domestic provision for uncollectible accounts. Sears said charge-offs rose to 6.11% from 5.43% last year because of "higher balances, seasoning of the MasterCard portfolio and higher bankruptcies." Year-over-year delinquencies increased 56 basis points to 7.87%.
Sears recently said it's trying to sell the credit operation.
The company predicted second-quarter earnings of 85 cents to $1 a share, assuming same-store sales fall by a percentage in the mid-single digits. It expects to earn $4.95 to $5.15 for all of 2003. Analysts polled by First Call were predicting earnings of $1.18 a share in the second quarter and $4.86 for the full year.