Target Corporation (TGT) recently reported better-than-expected third-quarter 2009 results.

Net earnings for the quarter jumped 18.4% year-over-year to $436 million, on the heels of a 5.5% decline in credit card expenses, an 18.3% fall in net interest expense, and lower effective tax rate (36.1% in the quarter as against 41.7% in the prior-year quarter).

Target’s quarterly earnings of 58 cents a share outdid the Zacks Consensus Estimate of 49 cents. Earnings for the quarter rose 18.6% year-over-year from 49 cents a share reported in the year-ago quarter. Total revenue for the quarter inched up by 1.1% to $15,276 million. Retail sales rose 1.4% to $14,789 million, but the revenue from the Credit Card segment fell 7.5% to $487 million.

Despite the stronger-than-expected result, Target holds a cautious outlook about its fourth-quarter results. Realizing the fact that customers are reluctant to pay higher prices, Target announced an aggressive price cut on DVDs, books and toys for the upcoming holiday season.

Target, which currently operates 1,743 stores in 49 states, competes with other major discount retailers such as Wal-Mart Stores Inc. (WMT) and Amazon.com Inc. (AMZN).

Comparable-store sales for the quarter fell 1.6%, an improvement over a decline of 3.3% posted in the prior-year quarter. The number of transactions rose to 0.6%, but the average transaction amount dropped 2.2% in the quarter.

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