Thursday, May 15, 2003

Federated down 48% for quarter


By Randy Tucker and Mike Boyer
The Cincinnati Enquirer

Federated Department Stores saw its profits almost cut in half during the first quarter of the current fiscal year, falling 48 percent compared with the same period a year ago.

But the Cincinnati-based parent of such department-store chains as Lazarus, Bloomingdale's and Macy's still managed to beat analysts' expectations.

Federated reported net income of $46 million, or 24 cents a share, for the quarter ended May 3, compared with $89 million, or 43 cents a share, for the same quarter a year ago.

That beat analysts' predictions by 9 cents a share, based on the average estimate of 15 cents a share by analysts polled by Thomson First Call.

Federated itself had forecast earnings of 14-19 cents a share in the first quarter.

"Our ability to produce planned earnings in a sales environment that continues to be weak is reflective of a number of factors,'' Terry Lundgren, Federated's president and chief executive officer, said. "Foremost among them being good inventory management and tight expense controls for which Federated is well known.''

Lower-than-expected store-closing costs also aided Federated's performance in the first quarter, the company said.

Federated originally predicted that those costs would reach $35 million in the first quarter, but the cost actually was $8 million.

Total sales for the period were down 4.7 percent to $3.29 billion, compared with $3.45 billion a year ago.

Sales at stores open at least a year - known as same-store sales and considered the best indicator of a retailer's health - were down 5 percent from last year.

In another report:

Pomeroy Computer Resources Inc.: The Hebron computer sales and service provider reported a 67 percent drop in first-quarter earnings.

For the three months ended April 5, the company, which will ask shareholders next month to change its name to Pomeroy IT Solutions Inc., said net income was $1.5 million, or 12 cents a share, down from $4.67 million, or 36 cents a share, a year ago.

The company, which said business has been depressed by cutbacks in information technology spending, said total revenues slipped to $129.9 million from $186.3 million a year ago.

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