“Our credit business contributed very strong growth in operating income,” Alan Lacy, Sears president and chief executive, said in a statement. “We are pleased with the quality of our credit portfolio and our ongoing productivity improvements. Retail results reflect strong sales performance across several important businesses and investments in new retail growth initiatives such as The Great Indoors.”
Consolidated gross margin as a percentage of merchandise sales and services fell to 25.6 percent from 26.5 percent in the third quarter of 1999. Both domestic and international margins declined. The decline in domestic retail margins is due to increased apparel markdowns and a higher mix of hardlines products, Sears said.
Credit operating income increased by about 22 percent to $385 million mostly due to substantial reductions in selling and administrative expense.
Excluding 1999 non-comparable items, retail operating income increased by 2.3 percent to $44 million.
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R.J. Reynolds Earnings Rise 6%
R.J. Reynolds Tobacco Holdings, parent of No. 2 U.S. cigarette maker R.J. Reynolds Tobacco Co., reported today a 6 percent rise in third-quarter profits, just topping analysts’ estimates.
The Winston-Salem, N.C.-based maker of Camel, Doral, Winston and Salem cigarettes said quarterly profits rose to $117 million, or $1.16 per diluted share, from $110 million, or $1.01, in the year-ago period. Analysts polled by First Call/Thomson Financial on average were forecasting earnings of $1.15 per share.
Third-quarter net sales climbed 6 percent to $2.12 billion from $1.99 billion in the year-earlier quarter. Cigarette shipment volume dropped 3.3 percent percent to 24.7 billion units, against an industry decline of 3.5 percent, R.J. Reynolds said.
The company said it sees full year net income rising 6 to 8 percent, to between $390 million and $400 million, resulting in diluted earnings per share between $3.85 and $3.95, an increase of 13 to 16 percent from 1999. Cash net income per diluted share is seen rising 10 to 12 percent to between $7.05 and $7.15 while Reynolds Tobacco shipment volumes are seen down about 1 percent.
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Higher Premiums Help Allstate
Allstate, the U.S. No. 2 car and home insurer, said today third-quarter operating earnings rose a greater-than-expected 34 percent, as increased premiums offset higher loss costs.
The Northbrook, Ill.-based company, second only to giant mutual State Farm in the United States car and home insurance market, said operating earnings, excluding a restructuring charge and capital gains, rose to $537 million, or 72 cents per share, from $401 million, or 51 cents, in the year-earlier quarter.
The results beat analysts’ average forecast of 70 cents per share, according to market research firm First Call/Thomson Financial.
Net profits for the quarter, including a $12 million restructuring charge and $129 million in realized capital gains, rose 31 percent to $644 million, or 87 cents per share, from $490 million, or 62 cents, in the same quarter a year ago. Overall revenues rose 14 percent to $7.45 billion.
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BMY Posts Double-Digit Growth
Pharmaceutical company Bristol-Myers Squibb, which late last month announced a restructuring, reported today a 13 percent rise in third-quarter net profits on strong double-digit sales growth in key drugs.