J.C. Penney Company, Inc (NYSE:JCP) finally on dollar route?
At some point of Wednesday, it seemed like J.C. Penney Company, Inc. (NYSE:JCP) shares will be doing a rebound but will the company be able to follow suit? In Wednesday’s trading session, JCP dipped by 4.85%. The opening price of the shares was $13.89 which touched an intraday high of $13.95 and closed at $13.33. More than 26.75 million shares were traded on Wednesday and the average volume of shares traded over a 30 day period was 18.70. The company has a market cap of 2.94 billion.
History repeats itself
So what was behind the sudden 7% surge that the shares experienced at mid-day on Wednesday? Analysts believe that on a certain level, the company might just have reached a point where a comeback is the only way to go. It must be remembered that JCP missed its revenue and earnings estimate by a massive scale.
Revenue dropped 11.9% to $2.66B which was way below the projected $2.76B.
The earnings per share dropped to $1.17 after backing-out loss for a tax-valuation allowance. This was worse than the estimates at $1.06. A year back, when the company had almost an identically dismal quarter, it had lost only $0.37/share. Now, JC Penney has lost $5.36/share over the past 4 quarters or around $1.2B which is close to 40% of its market value.
A ray of sunshine
In the meantime, same-store sales were way off mark by a shocking 11%. However, the company’s management noted that the there has been an improvement in comparable sales sequentially over this year. The Q2 sales figures were 470 basis-points better than the Q1 figures and same store sales had also bettered themselves over the last quarter.
In a way, this seemed to give the market some hope. It finally seems like JCP may be headed towards a brighter future. The downside is that the humungous losses that have been piling up but still drag its profits into the mire.