Photographer: Daniel Acker/Bloomberg
Sears Gains After Tax Benefit Helps Retailer Swing to a ProfitBy
Investors cheer results, even as sales continue to plummet
Company has been offloading assets and borrowing from its CEO
Sears Holdings Corp. jumped 17 percent in late trading after the U.S. tax overhaul helped the ailing retailer post a rare quarterly profit.
Net income amounted to $182 million in the fourth quarter, compared with a $607 million loss a year earlier, Sears said on Wednesday. The company got a roughly $470 million boost from the federal tax changes, which slashed corporate rates.
Sears alerted investors to the expected windfall last month, saying profit would be $140 million to $240 million. Sears also cut its long-term debt to $3.2 billion, down $1 billion from a year earlier.
The results have helped bring some optimism to investors, even as the chain’s sales continue to plummet. Its same-store sales -- a closely watched measure -- declined almost 16 percent last quarter, a sign the company didn’t benefit from a generally positive holiday season.
In the face of billions in losses, the company been unloading assets, shrinking the number of stores it operates, and borrowing money from Chief Executive Officer Edward Lampert. The company had $182 million in cash and equivalents at the end of the last quarter, down from $286 million a year earlier.
The stock climbed as high as $2.84 in extended trading. That follows a 32 percent decline this year through Wednesday’s close.