JCPenney Third Quarter Earnings Fall, Guides Lower

Plano, TX, November 15, 2007--J.C. Penney reported a 9% drop in quarterly profit, saying sales weakened "dramatically" in September and October, and the department store operator slashed its fourth-quarter forecast.

The company posted net income that fell to $261 million, or $1.17 per share, from $287 million, or $1.26 per share, a year earlier.

Excluding a benefit of $0.14 per share, earnings were $1.03, while analysts, on average, were expecting the company to earn $1.01 per share.

Total sales fell 1.1% to $4.73 billion while sales at department stores open at least a year, a key retail gauge, fell 3.5%.

Penney faced lagging sales in the quarter as the housing market slowdown, high energy prices and uncertain credit market took a toll on its shoppers.

In October, Penney cut its third-quarter profit forecast to a range of $1 to $1.04 per share, from $1.28, and earlier this month said it was approaching the fourth quarter cautiously as the challenging retail environment was expected to continue "for the foreseeable future."

Penney said it now expects fourth-quarter earnings to be in a range of $1.65 to $1.80 per share, down from its previous view of $2.41 per share.