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Sears, Roebuck's Net Income Rises 12 Percent

By Reuters
Published | Updated

HOFFMAN ESTATES – Sears, Roebuck and Co., the No. 4 U.S. retailer, on Thursday reported a 12 percent increase in fourth-quarter net income, despite lower sales, a year after posting hefty charges to close 89 stores.

Net income in the quarter ended Dec. 29 rose to $494 million, or $1.52 a diluted share, from $442 million, or $1.32 a diluted share, a year ago.

The net income figure for the 2001 quarter includes $163 million in after-tax charges to cover job cuts and a litigation settlement. Quarterly results for 2000 include accounting items and charges for store closures.

Excluding the charges, the retailer earned $657 million, or $2.02 a share. Those figures were at the high end of analysts' forecasts. Revenues were $12.24 billion, down from $12.37 billion a year ago.

``Despite slow holiday sales, our retail and related services profits increased solidly, driven by margin rate improvements across virtually all of our retail formats,'' Alan Lacy, chairman and chief executive, said in a statement.

Eleven analysts polled by Thomson Financial/First Call on average had expected the retailer to report a fourth-quarter profit of $2.00 a share. Their estimates ranged from $1.91 to $2.02 a share.

Sears also said it expected 2002 earnings per share to rise 13 percent to 15 percent. For 2001 the company posted earnings of $1.39 billion, or $4.22 a share, before one-time items.

``We anticipate that our retail and related services business will grow operating income at a low-double-digit rate, and credit and financial products will grow at a mid-single-digit rate,'' Lacy said.

Analysts forecast earnings per share of $4.40 to $4.81 in 2002, with a consensus of $4.71, according to Thomson Financial/First Call.

Retail and related services revenues fell 3.5 percent in the fourth quarter to $9.49 billion. Sales rose as declines at full-line stores offset improvement at The Great Indoors, dealer stores and product repair services, the company said.

Domestic credit and financial product revenues rose 1.8 percent to $1.33 billion.

Sears Canada revenues fell 3.1 percent to $1.3 billion.

Sears shares closed Wednesday at $51.47.