Cincinnati, OH, August 11--Federated Department Stores reported lower second-quarter profits Wednesday as a one-time cost for debt repurchases ate into earnings, and the company warned that profits for the third quarter and full year would fall slightly below consensus estimates.
Quarterly earnings fell to $78 million, or 43 cents per share, from $120 million, or 64 cents per share, a year ago. Latest quarter results include one-time costs of $59 million, or 20 cents per share, related to the company's repurchase of $273 million in long-term debt. Excluding these costs, Federated would have posted earnings of 63 cents per share in the latest second quarter. Analysts surveyed by Thomson First Call expected the company to earn 46 cents per share for the period.
Sales rose to $3.55 billion from $3.43 billion last year.
Federated is projecting an increase in same-store sales of 1.5 percent to 3 percent in the latter half of the year, contributing to a forecasted annual same-store sales increase of 3 to 4 percent in 2004.
The company said it expects to post earnings per share of 35 cents to 40 cents in the third quarter and $2.45 to $2.55 in the fourth quarter. Fiscal 2004 earnings are now projected to be in the range of $3.70 to $3.80 a share, including costs associated with the second-quarter debt repurchase. Federated previously expected 2004 earnings, including items, to fall between $3.60 and $3.70 a share.
Analysts currently expect the company to post earnings per share of 41 cents, $2.47 and $3.81 in the third quarter, fourth quarter and full-year period.
