U.S. Weekly Jobless Claims Flat; Sears Swings to Loss

Arthi Gupta
23 Feb, 2012
New York City

The U.S. indexes edged higher after weekly jobless claims remained unchanged at 351,000. Sears agreed to sell eleven stores to General Growth Properties for $270 million and planned a rights offering to raise nearly $400 million to $500 million.

[R]9:35 AM New York – The U.S. indexes edged higher after weekly jobless claims remained unchanged at 351,000. Sears agreed to sell eleven stores to General Growth Properties for $270 million and planned a rights offering to raise nearly $400 million to $500 million.[/R]

U.S. indexes edged higher after initial jobless claims remained unchanged.

European markets traded sideways after the European Commission said the euro area is likely to see a mild recession this year.

The Commission estimates real GDP in 2012 to contract 0.3% in the euro area and stated the inflation forecast for 2012 has been revised slightly upwards compared with the autumn, due to persistently high energy prices and increases in indirect taxes. It now stands at 2.3% in the EU and 2.1% in the euro area.

However, German business sentiment improved more than estimated in February, according to the Munich-based Ifo institute.

The confidence index rose to 109.6 in February from 108.3 in January.

Asian markets traded mixed.

U.S. Weekly Jobless Claims Flat

Initial jobless claims were unchanged in the week ended February 18th, according to a report released by the U.S. Labor Department today.

The report showed that jobless claims came in at 351,000, unchanged from the previous week''s revised figure of 351,000, the lowest level since March of 2008.

The four-week moving average fell 7,000 to 359,000 from 366,000.

The number of people still receiving jobless benefits declined 52,000 to 3.392 million in the week ended February 11 from a revised reading of 3.444 million.

Sears to Sell Eleven Stores

Sears Holdings Corporation agreed for the sale of eleven Sears full line store locations to General Growth Properties for a purchase price of $270 million.

In addition, the company plans to separate its Sears Hometown and Outlet Businesses and certain hardware stores through a proposed rights offering that is expected to raise nearly $400 million to $500 million.

Earnings Review

Analog Devices, Inc. ((ADI)), the semiconductor company reported first quarter revenues declined 11% to $648.06 million from $728.50 million in the prior year quarter. Net income for the quarter fell 37% to $139.38 million or 46 cents per diluted share compared to net income of $222.11 million or 72 cents per share in the same quarter last year.

Hormel Foods Corporation ((HRL)), the food company said first quarter sales grew 6.1% to $2.04 billion from $1.92 billion the prior year. Net earnings in the quarter fell 14% to $128.40 million or 48 cents per diluted share compared to net earnings of $148.83 million or 55 cents per share a year ago.

Kohl''s Corporation ((KSS)), the department-store chain reported fourth quarter net sales fell 0.3% to $6.02 billion from $6.04 billion, as restated, in the year-ago period, with quarterly comparable-store sales down 2.1%.

Net income in the quarter fell 7.9% to $455 million compared to net income of $494 million last year. Earnings per share for the period improved to $1.81 from $1.66 in the prior-year quarter.

For the year, net sales increased 2.2% to $18.8 billion on comparable store sales rise of 0.5%. Net income for the period increased 4% to $1,167 million and diluted earnings per share increased 17% to $4.30.

Sears Holdings Corporation ((SHLD)) stated fourth quarter total revenues decreased 4% to $12.48 billion from $13.0 billion in the earlier year period. For the quarter, domestic comparable store sales declined 3.4%, comprised of declines of 4.1% at Sears Domestic and 2.7% at Kmart.

Net loss in the quarter was $2.40 billion or $22.63 per diluted share compared with net profit of $374 million or $3.43 per share a year ago.

Full year revenues decreased $1.1 billion to $41.6 billion. For the year, domestic comparable store sales declined 2.2%, with declines of 3.0% at Sears Domestic and 1.4% at Kmart.

Net loss for the year was $3.1 billion or $29.40 loss per diluted share compared to $133 million or $1.19 per diluted share in 2010.