Sears Sees Blowout First Quarter

Sears

(S) - Get Report

said it expects pro forma first-quarter earnings to rise 107% from a year ago due to improved operating earnings in the retail and related-services segments.

The retailer expects to earn 93 cents a share on a pro forma basis, up from 45 cents a share in the year-ago quarter. Analysts polled by Thomson Financial/First Call had been expecting the company to earn 61 cents a share.

Reported income, including two charges and a gain, is expected to be 34 cents a share, compared to 53 cents in the year-ago quarter.

In a press release, Sears said the results show the "initial success of the strategic initiatives" the company has implemented, and "although revenues continue to be soft," the company's focus on inventory levels and operating expenses is creating profit.

Same-store sales for March, a key indicator of health in the retail industry, decreased 4.7% from last year, due primarily to weak sales in the electronics and lawn and garden departments. The company said its home appliance business remained strong, however.

For 2002, the company expects to see profits at least 17% higher than last year's. Originally, the company had forecast a 13% to 15% increase. No other specific guidance was provided due to the "uncertain economic outlook."

Shares of Sears were recently up 3.5% to $53.00 in premarket trading on the news after closing at $51.20 Tuesday.