Sears Reports Fourth-Quarter Profit Rise

Improved retail performance brought the rejuvenated Sears, Roebuck & Co. higher profit for the fourth quarter and all of 1994, the company said Tuesday.

Sears, the nation’s third-largest retailer, said its fourth-quarter profit was up nearly 26% at $685 million, or $1.74 a share, from $545 million, or $1.39 a share, during the fourth quarter of 1993.

Earnings were affected by a $195-million extraordinary gain from the early payoff of debt related to Sears Tower; a $104-million provision for additional California earthquake losses at Allstate Corp., which is 80%-owned by Sears, and an $80-million charge for Allstate’s early-retirement program.

Without those items, earnings for the quarter would have been $674 million, or $1.71 a share.

For all of 1994, Chicago-based Sears reported a profit of $1.45 billion, or $3.66 a share, compared to $2.37 billion, or $6.13 a share, for 1993.

Earnings for both years were affected by special items. In 1994, Allstate faced $781 million in earthquake losses and the early-retirement charge. Without extraordinary items, 1994 earnings would have been $2.12 billion, or $5.38 a common share.

Earnings for 1993 were affected by an $87-million favorable tax adjustment, a $635-million gain from the initial public offering of 20% of Allstate, $176 million of income from discontinued operations and $211 million in losses from early payments of debt. Without those items, 1993 income would have been $1.69 billion, or $4.33 a share.

“The Merchandise Group turned in its best performance since 1984, while Allstate’s underlying business performance was the best in its company’s history, excluding the impact of the earthquake,” said Edward A. Brennan, Sears chairman and chief executive.

The Merchandise Group’s earnings rose 18.4% in 1994, to $890 million from $752 million in 1993.

For the fourth quarter of 1994, Allstate reported earnings of $163.1 million, or 37 cents a share, compared to $259 million, or 57 cents a share, for the comparable period of 1993. Earnings for the quarter were affected by an after-tax loss of $130 million due to California earthquakes.

For the full year, Allstate reported earnings of $438.8 million, or $1.08 a share, compared to 1993 earnings of $1.3 billion, or $2.99 a share. Earnings for 1994 were affected by an after-tax earthquake loss of $975 million.

Sears plans to sell the 80% of Allstate it still owns later this year.

* Mattel Inc. said its fourth-quarter earnings improved as it began to realize the benefits of three corporate acquisitions.

For the fourth quarter ended Dec. 31, Mattel had net income of $42.9 million, or 19 cents a share, contrasted with a loss of $42.7 million, or 21 cents a share, in the 1993 fourth quarter.

Earnings in the year-earlier period were depressed by one-time charges related to the El Segundo-based toy maker’s acquisition of Fisher-Price Corp. Mattel said its pretax earnings for the latest quarter were up 38% to $135 million.

Sales for the most recent quarter totaled $1.03 billion, up from $753.9 million a year earlier.

For all of 1994, Mattel reported earnings of $255.8 million, or $1.12 a share, up from $117.2 million, or 53 cents a share, in all of 1993.

Sales totaled $3.21 billion, up from $2.7 million.

* AlliedSignal Inc., a large maker of aircraft components and auto parts, reported that its fourth-quarter profit rose 16% on strong sales gains as it introduced new products.

The company earned a record $205 million, or 73 cents a share, in the three months ended Dec. 31, compared to earnings of $178 million, or 63 cents a share, in the final quarter of 1993.

For the first time in seven years, sales and earnings figures were higher in each of AlliedSignal’s three main businesses: aerospace, automotive and engineered materials.

For all of 1994, the Morristown, N.J.-based company had a net profit of $759 million, or $2.68 a share, compared to earnings of $411 million, or $1.45 a share, in 1993. Sales rose to $12.82 billion from $11.83 billion.