J. C. Penney (JCP) Investors Nervous as Cash Crunch Looks Real

December 5, 2012 12:34 PM EST
Shares of J. C. Penney (NYSE: JCP) are lower Wednesday as cash concerns come to the forefront after updated language from the company in its third quarter 10-Q, which hit last night after the close.

On its Cash Flow Outlook the company stated:

For the remainder of 2012, we believe that our expected cash flow generated from operations, combined with our existing cash and cash equivalents, the savings resulting from the elimination of the dividend and the access to our credit facility will be adequate to fund our capital expenditures and working capital needs. In accordance with our long-term financing strategy, we may access the capital markets opportunistically. We may borrow under our credit facility for general corporate purposes including, but not limited to, seasonal working capital needs and to support ongoing letters of credit.

Our cash flows may be impacted by many factors including the economic environment, consumer confidence, competitive conditions in the retail industry and the success of our transformation strategy.

The wording "access to our credit facility", which was bolded above, is new and was not included in the second quarter 10-Q.

Cash concerns at J. C. Penney have been well-known. However this situation appears to be deteriorating.

Shares of J. C. Penney are down 1.9 percent, but off the lows.

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