Blockbuster swings to a profit

Blockbuster Inc. posted a first-quarter profit Thursday after it cut advertising costs in half and raised prices.

Net income was $45.4 million, or 20 cents a share, compared with a loss of $49 million, or 27 cents, a year earlier, the Dallas-based company said.

Revenue decreased 5.4% to $1.39 billion because of the sale or closing of 412 company-operated sites, the retailer said. Blockbuster had 7,719 stores as of April 6.

Blockbuster expects to lower costs further if it succeeds in its plans to acquire Circuit City Stores Inc.

The video rental chain aims to save money by closing stores, cutting jobs and buying in bulk, Chief Executive James Keyes said in April. Thursday's earnings might help persuade skeptical investors to support the deal, said Arvind Bhatia, an analyst at Sterne Agee & Leach Inc. "You could make the argument that Jim Keyes has turned around Blockbuster," Bhatia said. "If that's doing well, that makes it somewhat easier for Jim Keyes to make the case" for the purchase.

Blockbuster shares fell 2 cents to $3.05.

J.C. Penney sees hard year ahead

J.C. Penney Co. reported that first-quarter profit was halved and predicted "difficult" conditions for the entire year as consumers pull back on spending.

Net income fell to $120 million, or 54 cents a share, from $238 million, or $1.04, a year earlier, the suburban Dallas-based retailer said.

Sales fell 5% to $4.13 billion from $4.35 billion.

Per-share profit was better than the 50 cents expected by analysts surveyed by Thomson Financial.

Shares rose $2.07 to $46.32.

During the first quarter, total sales decreased 5.1%. Same-store sales, a key indicator of a retailer's health, decreased 7.4% but were at the top end of the company's revised guidance for a high-single-digit decrease.

The company predicted a low-single-digit decrease in total sales for the second quarter, with earnings per share of about 38 cents.

Nordstrom cuts forecast for 2008

Upscale department store Nordstrom Inc. reported a lower quarterly profit that beat Wall Street estimates.

The company lowered its fiscal 2008 earnings range and said it would cut operating expenses to lessen the effect of lower sales.

First-quarter profit was $119 million, or 54 cents a share, compared with $157 million, or 60 cents, a year earlier.

Analysts, on average, had been expecting earnings of 48 cents a share, according to Reuters Estimates.

As previously announced, first-quarter sales fell nearly 4% to $1.88 billion, and sales at stores open at least a year, a key gauge of retail performance, fell 6.5%.

In recent months, Seattle-based Nordstrom has noted weakness in the women's apparel category and in California, which accounts for nearly one-third of its sales. The retailer has posted declines in same-store sales for the last five months.

Nordstrom now expects fiscal 2008 earnings of $2.65 to $2.80 from an earlier forecast of $2.75 to $2.90.

For the second quarter, Nordstrom expects earnings of 65 cents to 70 cents, based on same-store sales declining 5% to 7%, compared with average analyst expectations of 68 cents.

The company's shares rose about 2% to $38.10 in extended trading after rising $1.15 to $37.29 during the regular session.

From Times Wire Services