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Circuit City loss increases; next quarter may be worse
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Circuit City Stores Inc. said Thursday its loss widened in the first quarter because of an 11.3 percent drop in sales at established stores.
The nation's second-largest electronics retailer also said it expects a bigger second-quarter loss than analysts are expecting and said it is suspending its dividend to keep capital available for its turnaround efforts.
Richmond, Va.-based Circuit City reported a loss of $164.8 million, or $1 per share, in the three months ended May 31, compared with a loss of $54.6 million, or 33 cents per share, a year ago. The company said revenue fell 7 percent to $2.30 billion from $2.49 billion.
Thomson First Call said analysts expected a loss of $1.06 per share on revenue of $2.37 billion. Shares of Circuit City fell 7 cents, or 1.7 percent, to close at $3.98 Thursday.
"This is a quarter of steady progress," CEO Philip J. Schoonover said in a conference call with investors. "We still have a long way to go, but I'm encouraged by what we've been able to accomplish." He also said a review of strategic alternatives to boost shareholder value continues.
The company had opened its books last month to Blockbuster Inc. to allow the video-rental chain to conduct due diligence in its takeover bid of just over $1 billion with plans for creating a huge chain that would sell electronic gadgets and rent movies and games.
Schoonover said the company on Thursday filed a shelf registration statement with the Securities and Exchange Commission for possible issues of stock or debt securities in order to give Circuit City "greater flexibility to respond to strategic opportunities."
For the second quarter, the company expects a loss of $170 million to $185 million. Analysts had anticipated a $143.4 million loss.
J.M. Smucker Co.The Ohio-based jams and jellies producer said Thursday that its fourth-quarter earnings fell 13 percent because of higher raw-materials costs and a comparison with its results from a year ago, when its Jif peanut butter got a lift from a competitor's recall.
The results fell short of Wall Street estimates and the company's stock fell 9 percent.
The report comes as Smucker, which has been growing on the strength of its acquisitions, is planning to add coffee to its menu of brands by buying Folgers in a $2.95 billion, all-stock deal from Procter & Gamble.
Smucker said it earned $37.1 million, or 67 cents per share, for the quarter ended April 30, compared with $42.5 million, or 75 cents per share, a year ago.
Excluding restructuring, merger and integration costs, the company earned 73 cents per share in the quarter. Analysts surveyed by Thomson First Call expected earnings of 78 cents per share.
Smucker's shares fell $4.39 to $45.55 in trading Thursday. Smucker's sales in the latest quarter rose to $590 million from $493.5 million a year ago. Total acquisitions added $279.7 million in sales.
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