Allstate Group Shines as Sears’ Net Rises 37%

Sears, Roebuck and Co., the nation’s largest retailer, said Wednesday its second-quarter earnings rose 37% with all units reporting increases led by Allstate Insurance Group.

Chicago-based Sears said quarterly earnings rose to $390.4 million, or $1.03 a share, from $284.9 million or 77 cents a share in the year-ago quarter. Revenues for the second quarter climbed to $11.72 billion from $10.75 billion a year ago.

Sear’s second-quarter earnings included after-tax realized capital gains of $71.2 million against $24.6 million a year ago. It also included a $58-million gain on the sale of Sears Savings Bank branch offices in California and a $32-million loss resulting from the early retirement of long-term debt.

“We continue to expect a favorable year for consumers and the economy, with moderate economic growth resuming in the second half after the low level of the second quarter,” said Edward Brennan, chairman and chief executive, in a statement.

He said consumer confidence remains high and that he expects 1987 will be the second best year since 1979 for existing home sales. “This bodes well for all of our business groups,” Brennan said.

Unit leader Allstate reported quarterly earnings rose 34.9% to $250 million from $185.6 million in last year’s quarter. “Allstate’s performance was outstanding with first-half income of $492.2 million far surpassing its previous record,” Brennan said.

The company said that the increase at Allstate was attributed to improved underwriting results, higher investment income and increased capital gains.

The company said its Dean Witter Financial Services Group had quarterly income of $31 million against a loss of $18.4 million in last year’s quarter. It said the increase was due to improved performance in securities-related business and the sale of branch offices.

It said Discover Card operations resulted in a $38-million loss, in line with expectations, against a $24.8-million loss a year earlier. Sears said its Discover Card continues ahead of schedule, with more than 16 million cards issued.

It said its merchandise group achieved increased income in spite of a $15 million after-tax charge for the consolidation of business systems centers and an early retirement program.