Kmart stock surges after report of second-quarter profit

Associated Press

DETROIT — Shares of Kmart Holding Corp. surged 17 percent yesterday after the discount retailer reported a profit for the second quarter and said that chairman and majority owner Edward Lampert is now free to invest the company's $2.6 billion in surplus cash.

There has long been speculation that Lampert plans to dismantle Kmart as a retailer and turn it into an investment empire akin to Warren Buffett's Berkshire Hathaway.

The fact that Lampert is now being given the authority to make investment decision boosts that theory and helped propel Kmart stock to a gain of $11.15 a share to $76.05 in Nasdaq Stock Market trading.

Kmart earned $155 million, or $1.54 per share, in the three months ended July 28. That compared with a loss of $5 million in the same quarter last year.