NEW YORK — Federated Department Stores Inc. reported diluted earnings per share on Tuesday of $2.55 for the fourth quarter, one cent more than Wall Street’s expectations.

Federated, amid speculation about a merger with May Department Stores, said diluted earnings per share for the 52 weeks of 2004 were $3.86 per share, compared with $3.71 in fiscal 2003.

Sales in the fourth quarter were $5.074 billion, an increase of 0.4 percent from last year. Total fiscal 2004 sales were $15.63 billion, up 2.4 percent from the previous year.

Income for the three months fell by 4.3 percent to $440 million, or $2.55 a diluted share, from $460 million, or $2.50, a year ago.

“We had a very strong year and a fourth quarter that finished at the high end of our expectations despite a slow start to the holiday shopping season,” Terry J. Lundgren, Federated’s chairman, president and chief executive officer, said in a statement.

For more see tomorrow’s WWD.