Penney%20Sees%20Cash%20Gains

Penney%20Sees%20Cash%20Gains - The company further noted...

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Wall Street Journal EARNINGS JANUARY 21, 2009 Penney Sees Cash Gains by KATHY SHWIFF J.C. Penney Co., looking to calm investors, said it expects to have more than $2 billion of cash on its balance sheet Jan. 31, the end of its fiscal year, and added that it hasn't tapped its $1.2 billion credit facility for cash needs. Tuesday, Penney shares fell amid concerns about its credit position. In 4 p.m. composite trading on the New York Stock Exchange, Penney's shares were trading at $17.42, down $1.89, or 9.8%. The stock has fallen 66% from its 52-week high last February as the department-store chain has struggled along with other retailers because of the sharp drop in consumer spending in 2008. The retailer said Tuesday that it has no debt maturities this year and won't be required to make a contribution to its pension plans. As of Nov. 1, the retailer had cash and short-term investments of $1.6 billion and long-term debt of $3.5 billion.
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Unformatted text preview: The company further noted its credit facility matures in April 2010 and said it is in talks with bankers to modify or replace the bank line during the first half of this year. Penney said its balance sheet benefited from an improvement in cash flow from operating activities less capital expenditures and dividends during 2008, and it expects that metric to further improve and be positive in fiscal 2009. Penney paid a $200 million debt maturity from its cash balances in August. The next one, amounting to about $500 million, will come in March 2010, which the company expects to fund from its cash balances. Following a 52% decline in its fiscal third-quarter profit, Penney in November that said it was controlling expenses and inventory to steel itself for the challenging holiday quarter. Write to Kathy Shwiff at kathy.shwiff@dowjones.com...
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