Printer Friendly

SEARS REPORTS THIRD QUARTER EARNINGS

 CHICAGO, Oct. 21 /PRNewswire/ -- Sears, Roebuck and Co. (NYSE: S) today reported third-quarter consolidated net income of $388.4 million, or 98 cents per common share, compared with a consolidated net loss of $853.8 million, or a loss of $2.30 per common share, reported for the same period in 1992. The loss in 1992 was primarily due to charges relating to insurance claims from Hurricane Andrew.
 Third-quarter 1993 net income reflects two unusual items, an $81.0 million favorable income tax adjustment resulting from recently enacted federal income tax legislation and a $65.5 million extraordinary charge relating to the early pay down of debt. Excluding these unusual items, third-quarter income was $372.9 million, or 94 cents per common share, which represents the second most profitable third quarter in the company's history.
 Sears Chairman and Chief Executive Officer Edward A. Brennan said, "With our strong near-record performance in the third quarter, following record first- and second-quarter performances, we continued to build our momentum."
 For the nine months of 1993, consolidated net income was $1.83 billion, or $4.73 per common share, compared with a loss in the same period last year of $254.1 million, or 75 cents per common share before the cumulative effect of accounting changes.
 Income from continuing operations in the third quarter was $453.9 million, compared with a loss of $992.3 million for the same period in 1992. For the nine months, income from continuing operations was $1.86 billion, compared with a loss of $656.9 million in 1992.
 Excluding the impacts of the recent federal income tax law change and the second-quarter gain from The Allstate Corporation's initial public offering, 1993 income from continuing operations was $372.9 million for the third-quarter and $1.15 billion for the nine months. Excluding the effect of Hurricane Andrew, income from continuing operations in 1992 was $151.3 million for the third quarter and $486.7 million for the nine months.
 Brennan said the strong performance this year is the result of the company's successful repositioning program, which was announced in September 1992, and improved operating performance in core merchandising and insurance businesses. Brennan said a revaluation of Sears deferred tax assets, necessitated by a 1 percent increase in the income tax rate, accounted for the favorable income tax adjustment from the recently enacted tax law. He also said the call of a $300 million, 7 percent deep-discount bond issue due to mature Nov. 15, 2001, which resulted in the $65.5 million extraordinary charge, will lower interest costs for the company in the future.
 Consolidated revenues, excluding businesses exited by Sears Merchandise Group, rose 8.6 percent to $12.72 billion from $11.71 billion in the third quarter, and increased 5.9 percent to $36.17 billion from $34.16 billion for the nine months.
 Exited businesses include the domestic catalog operation, Sears Business Centers, selected retail department and specialty stores, and certain installed home improvement services.
 As a result of Sears repositioning program 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.
 Earnings of the Allstate Insurance Group reflect Sears share of the income of The Allstate Corporation, which completed an initial public offering of 19.9 percent of its stock on June 9, 1993. Sears 80.1 percent ownership in Dean Witter, Discover & Co. was spun-off to Sears shareholders on June 30, 1993.
 Average common shares outstanding in the third quarter totaled 387.5 million, compared with 373.8 million a year ago.
 Continuing Operations
 Brennan said Sears Merchandise Group posted strong third-quarter earnings of $215.2 million, which included a $50.1 million favorable impact from recently enacted federal income tax legislation, compared with a loss of $49.4 million for the same period last year. Brennan said the Merchandise Group had strong, broad-based revenue growth, higher margins, and an improved selling and administrative expense ratio.
 Each of the major Merchandise Group units -- Merchandising, Credit and International -- recorded operating profits for the third quarter. In Merchandising, the Apparel and Home groups posted double-digit revenue increases for the quarter, while Automotive revenues improved modestly. Revenues for the third quarter, excluding exited businesses, rose 10.8 percent to $7.32 billion from $6.61 billion a year ago.
 Merchandise Group income for the nine months rose to $441.3 million, from a loss of $7.9 million, before the cumulative effect of accounting changes, for the same period a year ago. Revenues for the nine months of 1993 were $20.28 billion, 6.9 percent above last year's $18.97 billion, excluding exited businesses.
 Brennan said he was pleased with the Allstate Insurance Group's increase in third-quarter earnings, reflecting lower catastrophe losses and higher realized capital gains.
 Allstate Insurance Group's third-quarter income was $260.9 million, after minority interest of $64.8 million, compared with a loss of $845.8 million reported last year, which includes Hurricane Andrew losses of $1.14 billion. Third-quarter 1993 results included a $27.5 million favorable tax adjustment due to the recently enacted federal income tax legislation. Group earnings in 1993 reflect Sears 80.1 percent ownership of The Allstate Corporation.
 For the third quarter, Allstate Insurance Group's property-liability income increased to $330.3 million from income of $292.1 million in 1992, excluding losses from Hurricane Andrew. Underwriting losses were $119.0 million in the third quarter compared with a loss of $107.0 million, excluding Hurricane Andrew, in 1992. Catastrophe losses for the third quarter were $46.7 million, compared with $186.3 million in 1992, excluding Hurricane Andrew. Capital gains increased $23.1 million after-tax due to favorable market conditions. Income from life operations increased to $8.1 million, compared with $5.7 million a year ago, primarily due to lower realized capital losses. Allstate revenues grew 4.9 percent to $5.32 billion from $5.07 billion in 1992.
 For the nine months, Allstate income increased to $952.8 million, after minority interest of $89.7 million, compared with income of $782.9 million, excluding Hurricane Andrew and before the cumulative effect of accounting changes, for the prior year. Property-liability income in 1993 was $960.3 million, compared with income before accounting changes of $720.0 million, excluding the effects of Hurricane Andrew in 1992, reflecting lower catastrophe losses. Income from life operations rose 92.5 percent to $121.1 million from $62.9 million in 1992, before accounting changes. The improvement is primarily due to stronger operating income and lower commercial mortgage loan losses. Allstate revenues rose 3.8 percent to $15.66 billion, compared with $15.09 billion last year.
 Discontinued Operations
 For the third quarter, no income was reported from discontinued operations compared to $138.5 million in 1992. For the nine months, income from discontinued operations was $176.1 million, compared to $402.8 million in 1992.
 On Oct. 5, 1993, Sears announced the completion of the sale of its Coldwell Banker Residential business to the Fremont Group and said the final component of its repositioning program, the sale of Sears Mortgage Banking Group to PNC Bank Corp., will be completed by the end of the year.
 -0- 10/21/93
 /CONTACT: Gerald E. Buldak of Sears, 312-875-8371/
 (S)


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

TW -- NY023 -- 5028 10/21/93 09:33 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 21, 1993
Words:1263
Previous Article:COMMERCIAL METALS COMPANY REPORTS EARNINGS OF $21.7 MILLION
Next Article:NOVACARE AND REHABCLINICS ANNOUNCE MERGER AGREEMENT
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters