Updated from 10:47 a.m. EST
Federated Department Stores
, which runs
among other retail destinations, said Wednesday that its operating earnings declined 32% in the latest quarter, as the company grappled with problems at its ailing
Federated reported third-quarter operating income -- excluding asset writedowns and restructuring charges of $795 million linked to the Fingerhut unit -- of $204 million, or 26 cents a share, compared with $302 million a year earlier. Including those items, however, the Cincinnati-based company posted an overall net loss of $668 million, or $3.32 a share, compared with a profit of $123 million, or 56 cents a share, a year ago. Federated, which like other retailers also is dealing with the effects of a slower economy and higher fuel prices, was expected to post profits of 20 cents a share, according to
First Call/Thomson Financial
Federated finished Wednesday regular trading down 25 cents at $34.19.
Sales for the third quarter inched up 1.4% to $4.2 billion from $4.1 billion in the comparable quarter of 1999. During the three-month period, Federated opened a Macy's store in Puerto Rico, Florida and California.
Seeking to save $40 million a year, Federated said about a month ago that it would
cut about a quarter of the workforce at Fingerhut, which is plagued with a heap of consumer credit card delinquencies. It also added that it would tighten its credit standards and go after better customers.
At the time, Federated said it would take a charge of up to $100 million in the third and fourth quarters because of the restructuring, goodwill and asset writedowns of $680 million after taxes in the third quarter.
Federated acquired Fingerhut in 1999 in a bid to take advantage of the company's electronic-commerce capabilities and vast customer database. But after accepting easy-credit terms, increasing numbers of Fingerhut customers, who tend to have lower incomes than those who shop at Macy's and Bloomingdale's, couldn't pay their bills.
Federated operates more than 400 department stores across the nation under several names including
The Bon Marche