J.C. Penney, Lowe’s Beat — Monday’s IP Market Recap

A pair of retailers that announced earnings Monday needed some analyst window dressing to help offset otherwise negative reports.

J.C. Penney (NYSE:JCP) and Lowe�s (NYSE:LOW) each beat Wall Street expectations Monday — with JCP earning third-quarter earnings of 11 cents per share against Zacks Consensus estimation of a 12-cent loss, and Lowe�s recording adjusted EPS of 35 cents, vs. analysts� expectations of 33 cents. But the beats didn�t tell the whole tale.

J.C. Penney�s 11 cents per share were 42.1% lower than the year-ago quarter�s 19 cents per share, and including one-time items, the retailer actually lost 67 cents per share. JCP fell short of quarterly sales expectations, registering $3.99 billion vs. Zacks’ estimated $4.02 billion, and both its Internet sales and same-store sales dropped from 2010 marks.

Lowe�s — which announced in October that it’s closing 20 stores and cutting 2,000 jobs to streamline operations — reported net income was $225 million, down 45% from the year-ago period. One-time charges cut the company�s pretax earnings by $336 million. The company�s diluted EPS were 18 cents per share, down from 29 cents in 2010. Lowe�s guidance for the fourth quarter wasn�t magical, either, with the company forecasting same-store revenue to be flat to up 1%.

The companies� stock paths diverted, with LOW shares gaining about 1.7% to finish the day at $23.50, and JCP dropping 2.8% to $32.98.

Also Monday, Warren Buffett told CNBC that his third-quarter spending spree included a mad grab for IBM (NYSE:IBM) shares, with his Berkshire Hathaway (NYSE:BRK.A, BRK.B) increasing its stake in IBM to about 64 million shares, or about 5.5% of the company. However, at least for the day, investors seemed to take absolutely no notice, with IBM shares trading almost flat at $187.35. Still, Buffett�s buys show IBM has plenty going for it — and investors might consider buying into Big Blue, too.

Three Up

• Amylin Pharmaceuticals (NASDAQ:AMLN): Up 4.29% (43 cents) to $10.45.
• Las Vegas Sands (NYSE:LVS): Up 3.3% ($1.53) to $47.90.
• Salesforce.com (NYSE:CRM): Up 2.81% ($3.65) to $133.52.

Three Down

• ING Group (NYSE:ING): Down 4.95% (40 cents) to $7.68.
• Vertex Pharmaceuticals (NASDAQ:VRTX): Down 4.33% ($1.36) to $30.03.
• Tata Motors (NYSE:TTM): Down 4.05% (75 cents) to $17.76.

As of this writing, Kyle Woodley did not own a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps.