Investors Bail on J.C. Penney Before Earnings

The consensus estimates for call for an earnings per share loss of $0.82 in the fourth quarter and a full-year loss of $6.11 per share. The quarterly loss is a full nine cents worse than the expectation just 90 days ago.

The company reported preliminary results earlier this month that were barely better than nothing and well below expectations. Then it said that it would close 33 stores and fire more than 2,000 employees.

Now that the company’s earnings date is upon us, investors likely were expecting that J.C. Penney would announce that it planned to close more stores, fire more people and even, perhaps, sell off some its real estate. No news has been forthcoming, and in this case no news is not good news.

J.C. Penney seems to think that the liquidity it piled up last year, together with a development on 240 acres of land near its corporate headquarters in Texas, will see it through its latest turnaround effort. Some analysts agree, but others have cut their price targets to below $5 a share, with one going as low as $2.50.

J.C. Penney is running out of time, not to say money, and the company seems pretty complacent and satisfied that it is doing all it can to recover. Shareholders were not seeing it that way Monday morning.

Shares were down more than 5% Monday morning, at $5.34 in a 52-week range of $4.90 to $22.98.