Sears Holdings Earnings: Profit Snaps Streak of Losses

S&P 500 (NYSE:SPY) component Sears Holdings Corporation (NASDAQ:SHLD) climbed to a profit in the first quarter and beat Wall Street’s expectations in the process. Sears Holdings is a retail conglomerate with full-line and specialty retail stores in the United States and Canada. It is the holding company of Kmart Holding Corporation and Sears, Roebuck and Co. Its three reportable segments are Kmart, Sears Domestic and Sears Canada.

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Sears Holdings Earnings Cheat Sheet for the First Quarter

Results: Reported a profit of $189 million ($1.78 per diluted share) in the quarter. Sears Holdings Corporation had a net loss of $170 million or a loss $1.58 per share in the year-earlier quarter.

Revenue: Fell 2.8% to $9.27 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Sears Holdings Corporation beat the mean analyst estimate of a loss of 59 cents per share. Analysts were expecting revenue of $9.15 billion.

Quoting Management: Lou D’Ambrosio, Sears Holdings’ Chief Executive Officer and President, said, “We are pleased with the results for the first quarter and our progress towards restoring profit growth and transforming our Company. Our actions were driven by a focus on three core priorities: one) enhancing financial and operational discipline; two) improving our core retail operations; and three) leading customer based innovation through integrated retail and an engaging membership program, Shop Your Way Rewards. I want to thank all the associates at Sears Holdings for their commitment and hard work in delivering the first quarter results.”

Key Stats:

The company trumped estimates last quarter after falling shy in the two quarters prior. In the fourth quarter of the last fiscal year, it missed the mark by 14 cents, and in the third quarter of the last fiscal year, it came in under estimates by 57 cents.

SHLD’s profit in the latest quarter interrupts a three-quarter streak of losses. The company reported a net loss of $2.4 billion in the fourth quarter of the last fiscal year, a loss of $421 million in the third quarter of the last fiscal year and a loss of $146 million in the second of the last fiscal year.

Looking Forward: Analysts are increasingly optimistic about the company’s results for next quarter. Over the past sixty days, the average estimate for the second quarter has gone up from a loss of $2.32 per share to a loss of $1.29. Over the past ninety days, the average estimates for the fiscal year has risen from a loss of $6.82 per share to a loss of $2.32.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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