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In the current market, which isn't quick to forgive, who would have thought that a company could report earnings that miss estimates by 28 cents, only to rally over 10 percent on heavy volume? Well, when the stock is beleaguered Rite Aid (RAD – 3-5/16), any nugget of good news is phenomenal news, and the firm's same-store sales numbers were apparently enough to make the Street forget about the firm's downside earnings surprise.
This morning before the open, the pharmaceutical retailer announced a 74-cent loss for the third quarter, significantly steeper than the 46-cent loss analysts had been expecting. However, the firm promptly followed up this report with news that same-store sales for the quarter climbed 10 percent. RAD officials also said they have confidence that the retailer will be able to generate the cash needed to succeed in the long term.
Technically speaking, RAD has fallen off a fairly steep cliff in the past two years, losing over 93 percent of its share price. The security has now been trading in single-digit territory for just under a year.