P.M. BRIEFING : Sears Reports Adjusted Income Up

Sears, Roebuck & Co. today reported a 63.7% drop in its first quarter net income but the retailing giant said the results were distorted by an accounting change that inflated last year’s earnings.

Excluding the $544.2-million credit Sears gained in the first quarter of 1988 with a new accounting method, the company’s net income rose 56.3% in the first quarter of 1989, Sears said. Sears reported net income of $257.7 million, or 70 cents a share, for the first three months of this year. The figure compared with $709.1 million, or $1.87 a share, for the same period a year ago.

First-quarter revenue rose 10.9% to $12.16 billion, compared with $10.96 billion in 1988’s first quarter. Chairman Edward A. Brennan said all Sears business groups reported record-high quarterly revenue.

Sears also owns Allstate Insurance, Dean Witter Financial Services and Coldwell Banker Real Estate.