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SEARS REPORTS RECORD FIRST-QUARTER EARNINGS

 CHICAGO, April 20 /PRNewswire/ -- Sears, Roebuck and Co. (NYSE: S) today reported record first-quarter consolidated income of $435.0 million, a 59 percent increase over last year's income of $274.2 million, before the cumulative effect of accounting changes. The net loss in the first quarter of 1992 after the accounting changes was $1.60 billion.
 Earnings per common share for the quarter were $1.13, a 50.7 percent increase over the 75 cents reported in 1992 before the cumulative effect of accounting changes, and reflect the dilutive effect of a mandatorily exchangeable preferred stock offering in February 1992.
 Sears Chairman and Chief Executive Officer Edward A. Brennan said, "It was the best first quarter in Sears 106-year history, with especially strong results coming from continuing operations." Brennan said the results also reflected the initial impact of the company's previously announced repositioning and restructuring programs, which are proceeding on schedule. "Our board and management worked very closely on the components and timing of our repositioning program and market reaction has been very positive," Brennan said.
 Sears previous first-quarter record, before accounting changes, was $285.1 million in 1987.
 As a result of Sears earlier announcement of plans to divest some of its financial services units in 1993, the company now reports results from continuing operations, which include Sears Merchandise Group, Allstate Insurance Group and Homart Development Co., separately from results of discontinued operations, consisting of Dean Witter, Discover & Co. and Coldwell Banker Residential Services.
 SEARS, ROEBUCK AND CO.
 (After-tax $ in millions, except per common share amounts)
 First Quarter Percent
 1993 1992 Change
 Net income consists of:
 Continuing operations $317.0 $ 130.1 143.7
 Discontinued operations 118.0 144.1 (18.1)
 $435.0 $ 274.2 58.6
 Cumulative effect of
 accounting changes - (1,873.4) -
 Net income (loss) $435. $(1,599.2) -
 Earnings per common share consists of:
 Continuing operations $ 0.82 $ 0.34 141.2
 Discontinued operations 0.31 0.41 (24.4)
 $ 1.13 $ 0.75 50.7
 Cumulative effect of
 accounting changes - (5.29) -
 Net income (loss) $ 1.13 $ (4.54) -
 In the first quarter of 1993, continuing operations reported income of $317.0 million, compared with $130.1 million in the same quarter of 1992. Improved performance reflects, in part, the elimination of losses from several Merchandise Group businesses which Sears is exiting, including the domestic catalog operation; Sears Business Centers, which was sold in February 1993; and the closing of certain retail department and specialty stores. In the first quarter of 1992 these businesses incurred $64.3 million in after-tax losses. Consolidated revenues, excluding businesses that the Merchandise Group is exiting, rose 2.5 percent, to $11.3 billion from $11.02 billion, in 1992.
 Merchandise Group income was $63.6 million, compared with a loss before accounting changes of $23.8 million for the first quarter a year ago. Excluding the impact of exited businesses, a restructuring charge, and a gain on the sale of Sears Mexico stock, income before accounting changes for 1992's first quarter was $51.7 million. Group revenues, excluding exited businesses, increased 2.1 percent to $6.11 billion from $5.98 billion, reflecting strong sales performance in most apparel lines, fine jewelry, appliances and hardware, but partially offset by some planned declines in automotive and installed home improvement revenues.
 Allstate's first-quarter income was a record $320.1 million, up 25.3 percent from $255.5 million for the prior year before accounting changes. Brennan said this performance was particularly impressive considering the substantial claims from the storm that battered the East Coast in March. Last year's final loss for the quarter was $70.1 million after a charge of $325.6 million from the cumulative effect of accounting changes. Property-liability income before accounting changes rose $32.1 million. Underwriting results for the quarter improved to a loss of $159.3 million, compared with a loss of $218.0 million in 1992. These results included catastrophe losses of $224.6 million in 1993 and $122.4 million in 1992. Pre-tax investment income declined $14.9 million, or 4.1 percent, to $348.0 million for the quarter, but was more than offset by an increase in pre-tax capital gains of $20.8 million. The decline resulted from lower cash levels due to payments made in connection with Hurricane Andrew and continuing low interest rates. Income before the accounting changes from life operations increased $38.2 million, primarily due to improved operating results and increased capital gains. Revenues for Allstate grew 2.3 percent to $5.12 billion from $5.0 billion in 1992.
 First-quarter income from discontinued operations of Sears, Roebuck and Co. was $118.0 million, after minority interest of $8.9 million in 1993, compared with $144.1 million in the first quarter of last year. A non-recurring after-tax gain of $32.1 million from the sale of a minority interest in SPS Transaction Services, Inc. was included in the first quarter of 1992.
 /NOTE TO EDITOR: Dean Witter, Discover & Co. will report its performance later this morning./
 Update on Repositioning Program
 Brennan said the initial public offering for as much as 20 percent of Allstate is expected in June, and the planned sale of the residential services companies of Coldwell Banker is proceeding on schedule. Brennan also said that Sears expects to distribute to its shareholders, as a special dividend later this year, its 80 percent ownership of Dean Witter.
 /NOTE TO EDITOR: See example/
 HOW THE DEAN WITTER, DISCOVER DISTRIBUTION (SPIN-OFF) WILL WORK
 Later this year, Sears expects to distribute to its common shareholders, as a special dividend, the shares of Dean Witter, Discover & Co., that are now owned by Sears, which represent about 80 percent of Dean Witter's shares. Sears shareholders will receive about 4/10ths of a share of Dean Witter for each share of Sears, based on the ratio of Dean Witter shares to be distributed to outstanding Sears common shares. Fractional shares will not be issued and their value will be paid to Sears shareholders in cash.
 Example: If a shareholder owns 100 Sears common shares at the time of the distribution (called a spin-off), the shareholder will receive about 40 shares of Dean Witter and will also continue to own the 100 shares of Sears.
 When the distribution occurs, the market value of a Sears share is expected to decline because Sears will no longer own the Dean Witter shares. The amount of the decline cannot be precisely predicted and market forces could affect the result, however, it should be approximately equal to 4/10ths of the price of a Dean Witter share at the time of distribution. The total value of the Sears and Dean Witter shares at the time of distribution should be equal to the value of a Sears share prior to the distribution.
 Sears and Dean Witter are expected to pay separate dividends to their shareholders following the distribution, subject to approval of their respective boards. Sears current quarterly dividend is 40 cents per common share. Dean Witter has stated its intention to pay quarterly dividends, starting with the second quarter of this year, of 10 cents per share (which is the present equivalent of about four cents per Sears common share).
 Sears expects that the distribution of Dean Witter shares will not be treated as a taxable transaction for Federal income tax purposes, for either the Company or its shareholders.
 -0- 4/20/93
 /CONTACT: Gerald E. Buldak for Sears, 312-875-8371/
 (S)


CO: Sears, Roebuck & Co. ST: Illinois IN: REA SU: ERN

LR -- NY027 -- 7820 04/20/93 09:08 EDT
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