- The Washington Times - Thursday, February 20, 2003

Here is a look at some of Thursday's top business stories:

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Earnings double at J.C. Penney

PLANO, Texas, Feb. 20 (UPI) — Retailer J.C. Penney Co. Inc. said its fourth-quarter operating profit doubled as aggressive advertising and markdowns helped drive better-than-expected holiday sales.

The retailer, which owns the Eckerd drugstore chain as well as its namesake department stores, said it posted a fourth-quarter net income of $202 million, or 68 cents a share, compared with $95 million, or 32 cents a share, including one-time items, during the same period a year earlier.

Analysts on Wall Street were expecting J.C. Penney to post a net income of 66 cents per share, according to Thomson First Call.

The retailer said earlier this month its earnings would be at least 65 cents, which was the high end of analysts' estimates at the time.

Sales inched up 0.1 percent to $9.55 billion, weighed down by a steep 20.7 percent drop in catalog sales.

Allen Questrom, chairman and chief executive officer said, "Our focus is on strengthening our customer franchise through improved merchandise assortments and more powerful marketing programs that deliver superior value, and an enhanced store environment that improves the shopping experience.

"Over the past two years, both department stores and catalog, and Eckerd have increased operating profit margin by about 100 basis points per year, which is a significant accomplishment. The department store improvement reflects some of the early benefits of a centralized organization and improved customer service. Catalog has implemented major changes in its business model that have increased its contribution to operating profit. Eckerd has successfully implemented many changes in its operations, dramatically improving results," Questrom said.

Looking ahead, Questrom said, "As we begin the third year of a very complex turnaround we face internal challenges and many uncertain external factors, but we believe that each of our businesses will continue to improve.

"In department stores, we will make progress toward completing our major centralization initiatives, and in catalog, our focus will be on sales growth. In Eckerd, we will begin to improve our sales performance as we accelerate new store growth. Therefore, we now expect earnings to be in the range of $1.50 to $1.70 per share for the year, with first quarter earnings expected to be in the low 30 cents per share," he said.

"The progress we have made over the past two years, during a challenging retail environment, reinforces my confidence that we are on track to achieve our long-term financial goals," Questrom said.

J.C. Penney currently operates 1,049 JCPenney department stores throughout the United States, Puerto Rico, and Mexico, and 54 Renner department stores in Brazil. Eckerd Corporation operates 2,686 drugstores throughout the Southeast, Sunbelt, and Northeast regions of the country.

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RadioShack posts higher results

FORT WORTH, Texas, Feb. 20 (UPI) — RadioShack Corp., the nation's third largest electronics retailer, said it posted higher fourth-quarter profits despite sluggish sales of wireless phones and other gadgets.

RadioShack, the nation's largest seller of wireless phones and accessories, said its fourth net income rose to $109.1 million, or 63 cents a share, from $35.2 million, or 18 cents a share during the same period a year earlier.

Analysts on Wall Street were expecting the retailer to post a net income of 59 cents a share, according to Thomson First Call.

The retailer trimmed its earnings outlook on Jan. 3 to a range of 58 cents to 60 cents a share.

RadioShack reported that fourth-quarter sales fell by 1 percent to $1.50 billion from $1.52 billion a year ago. It said sales at stores open at least a year, or same-store sales, increased by 2 percent.

Leonard Roberts, chairman and chief executive officer, said, "RadioShack's fourth quarter earnings are the result of respectable same store sales in a challenging retail environment.

"The company also generated $375 million of free cash flow for the full year, exceeding its free cash flow guidance," he said.

Looking ahead to the first quarter 2003, RadioShack said it is comfortable with the consensus earnings per diluted share estimate of 33 cents a share. First quarter 2002 earnings per diluted share were 31 cents.

RadioShack also said it expects full year 2003 earnings per share to be at least $1.60, representing a 13 percent increase over its full year adjusted 2002 earnings per share.

RadioShack currently operates more than 7,200 outlets nationwide.



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