JCPenney's Shiny New Earnings Estimates From Argus

J C Penney Company Inc JCP reported robust 2Q results on August 12, with the operating income ahead of the estimate, driven by lower-than-expected SG&A expenses.

Argus’ Christopher Graja maintains a Hold rating on the company.

2Q Results

“Total sales were slightly below consensus, but comps matched Street expectations. Management still expects to improve on the $131 million of free cash flow it delivered last year,” Graja mentioned.

JCPenney also expects to generate about $1 billion in EBITDA, driven by a 63 percent increase in 1Q and a 59 percent increase in 2Q.

The company generated cash from operations of $186 million during the quarter, up from the $$2 million reported for 2Q15.

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“The net loss was smaller this year and inventories were a smaller drag on 2Q cash generation,” the analyst stated.

Estimates Raised

The EPS estimates for FY17 and FY18 have been raised from $0.08 to $0.10 and from $0.50 to $0.55, respectively.

Full ratings data available on Benzinga Pro.