Is Federated as Flush as It Looks?

摘要

Ever since federated Department Stores Inc. acquired May Department Stores in August, 2005, Wall Street has cheered the creation of the retail colossus. Investors have taken heart in the company's rising free cash flow—the cash from operations left over after investments hack into the business. Anticipation of large cost savings and increased market share has helped fuel a 43% rise in shares since the deal's announcement in February, 2005. Even a shortfall in first-quarter earnings, reported on May 16, and weak results from old May stores haven't dampened the enthusiasm. Says Federated CEO Terry J. Lundgrenrn (page 76): "The merger is not just going well. It's going extremely well."