Sears Earnings Declined 30% In Third Period --- Results, Particularly in Area Of Real Estate, Show Evidence of Recession
CHICAGO -- Sears, Roebuck & Co., issuing an earnings report dotted with signs of a recession, said third-quarter net income plunged 30% from weak year-earlier results.</br></br>The retailing and financial-services giant posted net income of $179.2 million, or 53 cents a share, compared with $257.5 million, or 75 cents a share, a year earlier. Revenue rose 5.9% to $13.96 billion from $13.18 billion.</br></br>Sears attributed the poor showing mostly to lower gains from property sales by its Coldwell Banker real estate unit and soft home sales. Analysts took this as a sign of recession, noting that it is becoming more difficult to sell shopping centers and Sears is likely to report declines in gains from such sales for some time.</br></br>The core Sears business of operating domestic stores and a catalog business recorded a narrowed loss of $2.3 million in the period, compared with a year-earlier $6.9 million loss. But its gross profit margin slipped because of discounting to buoy sales. And, in a further signal of economic slowdown, the company added $50 million to its provision for uncollectible Sears charge-card accounts in anticipation of more personal-bankruptcy filings.</br></br>The latest results were in line with expectations of analysts, who had trimmed their forecasts in recent weeks. In composite trading on the New York Stock Exchange yesterday, Sears shares closed at $25.375, up 37.5 cents.