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Sears Holdings Goes Negative

Sears Holdings (Nasdaq: SHLD  ) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 28 (Q4), Sears Holdings met expectations on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share contracted to a loss.

Margins dropped across the board.

Revenue details
Sears Holdings reported revenue of $12.48 billion. The three analysts polled by S&P Capital IQ expected sales of $12.44 billion on the same basis. GAAP reported sales were 5.0% lower than the prior-year quarter's $13.14 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.54. The three earnings estimates compiled by S&P Capital IQ forecast $0.78 per share on the same basis. GAAP EPS were -$22.63 for Q4 versus $3.43 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 24.5%, 350 basis points worse than the prior-year quarter. Operating margin was -0.6%, 660 basis points worse than the prior-year quarter. Net margin was -19.2%, 2,200 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $9.46 billion. On the bottom line, the average EPS estimate is -$2.03.

Next year's average estimate for revenue is $40.29 billion. The average EPS estimate is -$5.32.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 1,485 members out of 2,273 rating the stock outperform, and 788 members rating it underperform. Among 553 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 342 give Sears Holdings a green thumbs-up, and 211 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sears Holdings is hold, with an average price target of $27.25.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On February 27, 2012, at 11:52 AM, Normand696 wrote:

    How come this stock soars to $69 after such results and with with an average price target of $27.25 ? A good time to short ? What's the most realistic price in the next weeks ?

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