Sears Holdings Corp. (SHLD-NASDAQ) is trading down over 2% in pre-market activity after its earnings this morning. The company posted $1.40 EPS before items, up from $1.14 last year; but overall Net Income after items was $1.10 per share. Revenues were down 2.5% to $11.7 billion in fiscal 2007, as compared to $12.0 billion for the first quarter of fiscal 2006. Estimates were $1.22 EPS and $11.55 billion in revenues for the quarter.
Comparable store sales were down 3.9%, with Sears being -3.4% and Kmart showing -4.4%. It beleives that these declines reflect both increased competition and the impact of external factors such as rising energy costs, a slower housing market and poor weather conditions during the latter part of the first quarter of fiscal 2007. The company’s cash and cash equivalents came in at $3.4 billion at May 5, 2007 as compared to $3.2 billion at April 29, 2006 and $4.0 billion at February 3, 2007. It did not spend any cash repurchasing shares this quarter, although it still has $604 million that can be used to acquire shares.
With this one being a turnaround retailer with a hedge fund and hard asset kicker that is usually misunderstood by Wall Street, it is hard to know which way the buyers and seller swill spin Eddie Lampert & Co. It’s a bit like the teacher saying it doesn’t matter if they earth is round or flat, because he can teach it either way. You can also bet that Jim Cramer will be out positive, at least that’s been the case almost forever.
Jon C. Ogg
May 31, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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