By  on May 1, 2012

Shares of Sears Holdings Corp. on Tuesday opened the first trading session in May by spiking up 15.4 percent after the company provided an optimistic update on its first-quarter outlook, which also rode the tailwind garnered on Monday as the retailer updated its spin-off plans.

Shares closed at $62.05 in over-the-counter trading. Sears said Tuesday it is eyeing a first-quarter profit when the firm reports results on May 17.

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The retailer projected net income from continuing operations of $155 million, or $1.46 a diluted share, to $195 million, or $1.84. That compares with net losses of $165 million, or $1.53, a year earlier. The results include a gain of about $235 million from the sale of certain stores in the U.S. and Canada.

While Sears’ U.S. stores saw a double-digit comparable-store sales rise in apparel and footwear, total comps for the quarter fell 1 percent, while Kmart’s total comps declined 1.6 percent. The retailer also said that the Sears Canada operation, which posted waning apparel sales, showed a 6.2 percent comp drop.

Monday’s update on the status of the separation of its Sears Hometown and Outlet businesses provided a timeline, with the spin-off expected to be completed in the third quarter of 2012 via a rights offering that is expected to raise $400 million to $500 million in proceeds for Sears Holdings to give it additional liquidity. The new company will trade on the Nasdaq Stock Market under the ticker symbol SHOS. Sears announced the spin-off plans in February.

Since the rights will be distributed to holders of Sears Holdings’ common stock, and entitle holders to purchase shares of common stock of Sears Hometown and Outlet, Sears chairman Edward S. Lampert potentially could acquire additional shares of the spin-off. The company said Monday that Lampert, chairman of his hedge fund ESL Investments, which holds a significant stake in Sears, has said it “intends to exercise its subscription rights in full.”

That intent could have Lampert and ESL holding a bigger stake in the new company than the 62 percent stake in the original Sears Holdings. The soon to be publicly held firm is anticipated to perform better than the core Sears nameplate operation that uses the older big-box format. The newer units utilize a smaller footprint, and some are specialized Sears Hardware branded stores.

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