Federated Department Stores
reported a drop in third-quarter earnings, but excluding items, results beat analysts' projections by a penny. The company cited better sales trends, inventory management and solid gross margins.
Net income was $67 million, or 36 cents a share, which included income from discontinued operations totaling 16 cents a share. This compares with $106 million, or 54 cents a share, in the prior-year period.
Income from continuing operations was $67 million, or 36 cents a share, in the quarter ended Nov. 1, from $75 million, or 38 cents a share, a year ago. The company had expected to earn 30 cents to 33 cents a share, while analysts had forecast a profit of 35 cents a share, according to Thomson First Call.
Operating income was $173 million, or 5% of sales, compared with $188 million a year ago.
Total sales were $3.49 billion, an increase of 0.2% from last year's $3.48 billion. Same-store sales were up 0.3% in the quarter, the Cincinnati-based company said.
In the fourth quarter, Federated is forecasting a profit of $2.15 to $2.20 a share. Comparable-store sales are seen falling 1% to increasing 1%. Analysts are expecting $2.16 a share. The company earned $1.78 a share the year earlier.
Smith Barney Tuesday upgraded Federated shares from hold to buy and raised the price target from $53 to $58.
Shares of the company, which owns the Macy's and Bloomingdale's department store chains, closed at $50.17 Tuesday on the
New York Stock Exchange