Penney Earnings Beat Estimates, but Outlook Disappoints

J.C. Penney Co. (JCP) told investors it's coming out of defensive mode in 2010, launching new brands and remodeling stores to build sales. But it will be a while before it improves enough to pull its debt up to investment-grade levels.

Even while it posted fourth-quarter and year-end results that beat Wall Street's estimates, the department store chain's outlook for 2010 seemed to be too mild for investors' tastes. In a conference call with analysts, Penney's executives were repeatedly quizzed about their 2010 guidance for a comparable-store sales increase in the low-single-digit percentages and earnings per share of $1.55 for the year.