Target Corp. saw its profit climb in the fiscal 2012 third quarter, aided in part by a gain from the sale of its credit card receivables portfolio.


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Target 3Q earnings best Wall Street's forecast

November 15th, 2012

MINNEAPOLIS – Target Corp. saw its profit climb in the fiscal 2012 third quarter, aided in part by a gain from the sale of its credit card receivables portfolio.

Still, adjusted earnings topped Wall Street's expectations for the quarter, coming in toward the high end of analysts' estimates.

Target said Thursday that net income for the three months ended Oct. 27 was $637 million, or 96 per share, includes a 15-cent gain from the pending sale of its credit card receivables to TD Bank Group. Year-ago net earnings were $555 million, or 82 cents per share.

Adjusted earnings per share (EPS) were 90 cents for the 2012 third quarter, compared with 86 cents in the 2011 quarter. On average, analysts had projected EPS of 79 cents for the 2012 third quarter, with estimates ranging from a low of 74 cents to a high of 95 cents, according to Thomson Financial.

On the revenue side, 2012 third-quarter retail sales rose 3.4% to $16.60 billion from $16.05 billion a year earlier. Target said the sales gain reflected a 2.9% uptick in same-store sales and the contribution from new stores.

Segment earnings before interest expense and income taxes (EBIT) came in at $963 million in the quarter, up 3.4% from $931 million in 2011.  

In Target's U.S. credit card segment, third-quarter average receivables decreased 4.7% to $5.9 billion from $6.2 billion in the prior-year period.

"We're pleased with Target’s third quarter financial performance, which reflects superb execution across each of our business segments," Target chairman and chief executive officer Gregg Steinhafel said in a statement.

"We are well-positioned to deliver strong fourth-quarter performance by offering compelling merchandise and unbeatable value through initiatives like the Target/Neiman Marcus Holiday Collection, 5% REDcard Rewards and our new Holiday Price Match which allow our guests to shop at Target with confidence throughout the holiday season," Steinhafel added.

For the fourth quarter, Target forecasts adjusted EPS of $1.64 to $1.74. The average analyst estimate is $1.51, with the forecast running from a low of $1.44 to a high of $1.64.

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