Sears Profit Drops

In the quarter ended August 4, Sears earnings dropped to $65 million, or 50 cents a diluted share, down from the year-ago quarter's $173 million, or $1.15 a share. Per-share results benefited from a 15 percent decline in the number of diluted shares outstanding.

Revenues declined 4.1 percent to $11.76 billion from $12.26 billion a year earlier.

The second-quarter results "reflect the continued effects of a slowing economy, which contributed to the earnings declines we have experienced since the third quarter of 2007, said interim Chief Executive Officer W. Bruce Johnson.

While it was a "difficult quarter," Johnson said, the company has lowered its inventory levels by $500 million,which should lead to less promotional pricing, and improved profit margins, in the year's second half.

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