Third quarter earnings for J.C. Penney Company, Inc. (NYSE:JCP) don’t look good, although there is a bit of a silver lining to the dark cloud. This morning, the retailer reports a 26.1 percent decrease in sales at stores open a year or more during the third quarter. That decrease was much worse than Wall Street analysts expected. They forecast only a 17.9 percent decrease for the retailer’s sales during the third quarter.

J.C.Penney

On the positive side however, the retailer reports that its third quarter loss has narrowed, after officials lowered expenses and restructuring costs. Shares are down 8.8 percent, trading at $19.78 this morning in premarket trades. This year J.C. Penney’s stock has dropped 38 percent so far. Analysts from two of the nation’s top investment firms are offering opposite views of the retailer’s future. Shares are down this morning 4.4%.

Currently the department store chain is making efforts to become more competitive with rivals like Kohl’s Corporation (NYSE:KSS), Macy’s, Inc. (NYSE:M), and other department stores. According to equity research from Oppenheimer, the retailer’s efforts to make changes appear to be working, although they are not yet widespread enough to make an overall difference on the chain’s bottom line. Analysts at Oppenheimer believe that the company must keep its model intact while working to improve, and they don’t think that has happened yet.

However, their data does suggest that the stores that have already been reformatted seem to be performing well. In fact, management reports that their shop-in-shops are exceeding their expectations, while the rest of the store continues to experience challenges.

Oppenheimer analysts believe that J.C. Penney Company, Inc. (NYSE:JCP) officials are on the right track and that the company will turn the situation around, but they also feel that it will require investors to be very patient. Analysts are lowering their FY12 and FY12 estimates to reflect the third quarter’s weaker than expected results.

Analysts from Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) seem to disagree with those at Oppenheimer. They note that J.C. Penney’s Company, Inc. (NYSE:JCP) latest report indicates that the company no longer expects to end 2012 with more than $1 billion on its balance sheet. Like the analysts at Oppenheimer, Deutsche Bank AG (ETR:DBK) (FRA:DBK) (NYSE:DB) analysts believe that 2013 will be another rocky year for the retail chain, however they aren’t looking beyond next year in their forecasts.