Cincinnati, OH, May 16, 2006--Federated Department Stores raised its second-quarter financial forecast by $0.33 per share, due to a favorable tax settlement with the Internal Revenue Service.
The company projected earnings of $0.78 to $0.88 per share in the second quarter, and between $3.83 and $4.08 per share for the full year.
The outlook includes the tax settlement, and excludes one-time merger integration and inventory valuation costs and a gain on the sale of credit receivables.
The tax settlement, which involves losses related to the disposition of Fingerhut, will result in a cash refund of $158 million of prior year taxes with interest.
Federated said it expects to recognize a tax benefit of about $80 million and roughly $20 million in interest income in the second quarter of 2006.
Analysts expect the company to earn $0.56 per share for the quarter and $4.01 per share for the year.
