J.C. Penney Surges on Pricing Power — Thursday’s IP Market Recap

by Kyle Woodley | January 26, 2012 4:49 pm

[1]Plans to revitalize struggling retailer J.C. Penney (NYSE:JCP[2]) were met Thursday with much enthusiasm by investors, who carried JCP shares almost 19% higher on the second day of the company’s New York City launch event.

The overhaul, led by former Apple (NASDAQ:AAPL[3]) CEO Ron Johnson, will include a massive change in pricing, leaning toward lower everyday prices — as much as a 40% cut — in lieu of frequent sales.

On the business side, J.C. Penney will try to cut $900 million in expenses by 2014 — some of which will be gained through layoffs[4] — and the company said it expects full-year fiscal 2012 earnings to equal or surpass 2010’s adjusted EPS of $2.16.

JCP shares closed at $40.72 — the first time the stock has finished above the $40 mark since September 2008.

Also finishing a boom Thursday that it started in after-hours trading Wednesday was Netflix (NASDAQ:NFLX[5]), which rocketed 22% to $116.01 — a three-month high — on strong earnings and news that it had gained 610,000 customers in the most recent quarter.

The shorts were sent running on the news Thursday[6], but what remains to be seen is whether Netflix can survive competition from Hulu, Amazon’s (NASDAQ:AMZN[7]) eventual streaming service and others, and if its expansion in the U.K. and Latin America will take root.

Three Up

• Micromet (NASDAQ:MITI[8]): Up 32.1% ($2.66) to $10.94.
• LSI Logic (NYSE:LSI[9]): Up 10.9% (77 cents) to $7.85.
• United Continental (NYSE:UAL[10]): Up 6.3% ($1.29) to $21.70.

Three Down

• Monster Worldwide (NYSE:MWW[11]): Down 20.4% ($1.83) to $7.15.
• ETrade Financial (NASDAQ:ETFC[12]): Down 14.6% ($1.37) to $7.99.
• Sandisk (NASDAQ:SNDK[13]): Down 11.4% ($5.95) to $46.39.

Kyle Woodley is the assistant editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Check out recaps from previous trading days here[14].

Source URL: https://investorplace.com/2012/01/jc-penney-jcp-pricing-netflix-subscribers-nflx/

---