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Penney's earnings drop 13%

February 23, 2007|From the Associated Press

PLANO, TEXAS — Department store operator J.C. Penney Co. said Thursday that its fiscal fourth-quarter profit fell 13% partly because of higher taxes, and it predicted a weaker first quarter than analysts expected.

"We're seeing February being soft," Chief Executive Myron E. Ullman III said. But he said sales would rebound with new spring fashions.

Penney shares fell $2.96, or 3.4%, to $83.39.

Net income for the three months that ended Feb. 3 fell to $477 million, or $2.09 a share, from $551 million, or $2.34, a year earlier.

Earnings from continuing operations totaled $2 a share compared with $1.92 a year earlier. On that basis, analysts surveyed by Thomson Financial expected earnings of $1.97 a share.

Revenue grew 7% to $6.66 billion. Analysts had forecast $6.64 billion.

Same-store sales, or sales in stores open at least one year, a key measure for retailers, grew 2.2% in the quarter.

Penney predicted that operating profit would be flat in the first quarter but would improve modestly over the next 12 months. The company predicted net income of 99 cents a share for the first quarter -- below analysts' forecast of $1.05 a share.

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