5 Companies That Are Still Losing Money

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5 Companies That Are Still Losing MoneyNobody is going to argue that the economy is moving along swimmingly. But as bad as things may appear to be, things are working out in corporate America. Most companies are making money. In fact, many Wall Street darlings are checking in with record profits this earnings season.

Then again, most doesn't mean all.

There are some notable companies that are dressing up their bottom lines in red rather than the more fashionably and fiscally acceptable black. These aren't obscure start-ups that have yet to ramp up or behemoths where one-time charges are blurring adjusted profitability, either. Take a look at who is losing money this year -- and possibly beyond.

Sprint Nextel (S)
The country's third-largest wireless carrier finally has the iPhone, but it doesn't have the iPhone profitability that its two larger rivals are enjoying.

Sprint has problems. You have to go all the way back to 2007 to find the last time that the leveraged carrier posted a quarterly profit, and it's also going to be a long wait for profitability to return. Analysts don't see Sprint returning to profitability until 2014 at the earliest. That's going to be a challenge for a company with $16.3 billion in debt on its balance sheet.

AMR (AMR)
You don't need to see Pan Am on the air to know that airlines are back. Armed with juicy fees for checked bags, onboard meals, and entertainment, even the once-stodgy legacy carriers are bouncing back into the black despite pesky fuel costs.

All of the major airlines should close out 2011 with positive earnings but one – American, and American Eagle parent AMR.
Wall Street sees AMR losing a whopping $3.53 a share this year. The outlook after that calls for the air carrier to shave its deficit nearly in half come 2012 and post only marginal losses the year after that, but that also essentially pushes AMR's profitability out to 2014.

Airlines can be tough. Nimble players set the fares that the rest of the industry must follow. And they don't have the high salaries, chunky pension obligations, and older fleets of jets that need to be more actively serviced. In a year in which every publicly traded rival is profitable, you don't want to stand out as the profitless carrier.

Sears Holding (SHLD)
Sears used to invite shoppers to discover its softer side, but it's hard to find that when things are so, well, hard.

One can always argue that Sears and Kmart deserve each other as retail laggards, but the grim reality is that the combined company hasn't generated positive sales growth in years. Scrappier discounters nailed the "cheap chic" specialty, while reputation-puffing alliances haven't brought in the upscale clients that the meandering retailer desires.

It's not going to get any easier. Sears isn't expected to earn enough during its holiday quarter to offset its steep losses leading up to that point for the next couple of years.

MGM Resorts (MGM)
"The house always wins" is the old gaming adage, as casinos glam up gambling diversions where the odds are stacked in their favor. Well, MGM isn't winning. The company behind iconic Vegas casinos including the Bellagio, Luxor, and its namesake giant MGM Grand has been dealt a bad hand and it's playing it poorly.

The pros see MGM losing $0.53 a share this year. There are some MGM watchers on Wall Street that feel that the company may bet on black next year, but the consensus estimate shows MGM losing money until 2014.

Things may be hard in Vegas, but MGM's prolific peers are holding up just fine. Wynn Resorts (WYNN) and Las Vegas Sands (LVS) are comfortably profitable right now. Sure, they have promising properties overseas, but MGM has to be held accountable.

Rite Aid (RAD)
Running a drugstore chain seems to be an all-weather business. Folks still get sick during recessions, and the steady flow of medication refills should help offset any consumer spending fluctuations toward the front of the store.

Unlike its pharmacy competitors, Rite Aid isn't getting it done. The $6 billion in long-term debt and negative book value aren't helping. Losses should continue through fiscal 2015, as Rite Aid and its penny-stock share price have done a better job of attracting speculators than profitable shoppers.

Surely there must be some Visine available at its stores to help it -- and Sears, Sprint, AMR, and MGM -- get the red out.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article.




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31 Comments

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dabrownman

The only reason to go to Vegas is to play golf and even that is too expensive. Harry Reid killed his own. Obama was right, donlt go to Vegas give your money to the Messiah instead. You will still get ripped off but he might forgive your sin of being insane.

October 31 2011 at 9:56 AM Report abuse -1 rate up rate down Reply
Nancy and Bob

What Happened to, "A Good product at a fair price?"

October 30 2011 at 12:50 PM Report abuse rate up rate down Reply
Mike

I'm not suprised at Sears failing. Used to be a strong customer. Began to discover I couldn't get parts at the store. "Order online and wait." Last straw was a warranty issue. Was told item was out of warranty. It wasn't.
Next was "Fill out an online warranty request, wait for confirmation, send it in, if we think it's broken we'll fix it."Sears wont get better until they rediscover customer service.

October 29 2011 at 8:36 AM Report abuse rate up rate down Reply
rightshopping

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October 29 2011 at 2:53 AM Report abuse rate up rate down Reply
tuffy2

first of all the stores are using false advertising, 50 and 60% off of what, dothey sea loss, ll everything at loss. jewel and dominics buy one get one free, , what kind of bs is that. allthey do is raise the prices. and lower the package amount you buy. no store can stay in business with all kohlsof these large discouts, unless they are raiding warehouses at night i for one being a business man for 45 years can't see giving the store away like kohls. don't fall for there bs. they don't get the merchandise for nothing. false advertising. 10% may make sence not 60%.

October 28 2011 at 11:10 AM Report abuse rate up rate down Reply
wapitibowhunters

You forgot to mention anything run by the federal goverment. But I don't expect to read anything negative that might hurt Obumma from you guys.

October 28 2011 at 9:24 AM Report abuse rate up rate down Reply
palyzuc

.....'the economy is moving along swimmingly'....you do understand what that phrase means, correct? If you think this economy is moving along swimmingly obviously a bad economy would be a depression. Who edits these articles, if anyone ?

October 28 2011 at 9:12 AM Report abuse rate up rate down Reply
Judy Lynn

I am not a wal-mart shopper, I can't stand Walmarts, never could, but I like and shop at Sams Club retail outlet. I can't stand the cheap clothing made in China or Japan, I can't stand they are not kind to their employees, and I can't stand how they market the poor. When you visit Walmart you have to deal with a bunch of screaming snotty nosed unruly children, welfare moms pushing 2-3 baskets at a time with food that the average working family can not afford, and very rude cashiers with work ethics nothing like the sams employees. I feel as if Walmart has pimped the system because for many years sams did not take food stamps and that is were you can purchase in bulk, however when your given free foodstamp cards you do not think about purchasing in bulk to save money, using coupons, or concerving on inexpensive meals.

October 27 2011 at 10:58 PM Report abuse rate up rate down Reply
1 reply to Judy Lynn's comment
hgeorgech

Just where DO you shop (besies SAMs) ? Who are those lucky retailers?

America would like to know! Kindly inform us !

As Walmart and Sams are one in the same (ownership) seems mighty strange you see such a difference!

October 29 2011 at 12:19 PM Report abuse +1 rate up rate down Reply
davefromfwb1

I'm 41 years old and have bought and sold stocks now for 20 years now. There is a pattern I've noticed for the past 15 years and it's.....in October the stocks to up, they'll continue to go up for around the 3rd week of November, then they'll start going down after that. The REASON for this is.....all the rich stock fund managers and traders boost the stocks....better known as PUMP AND DUMP so they can collect their BIG MONEY for their nice Christmas presents. The people who don't know this will have their portfolios drained by FEE's and COMMISSION FEE's so their brokers can have a chomp out of your savings. I've seen this every year for the past 20 years. Trust me it's true.

October 27 2011 at 10:37 PM Report abuse -1 rate up rate down Reply
1 reply to davefromfwb1's comment
hgeorgech

Dave ... that's why millions of us watch you daily on CNBC

October 29 2011 at 12:20 PM Report abuse rate up rate down Reply
Dereck

I Filed Writ of Executions to seize the MGM Grand and the Luxor, I missed the Bellagio, i'd like to get my hands on that to.

October 27 2011 at 9:06 PM Report abuse rate up rate down Reply