Sears CEO Eddie Lampert just keeps trying

Sears Holdings (SHLD) Chief Executive Edward Lampert is the struggling retailer's largest shareholder and perhaps its biggest cheerleader as the once-venerable chain tries to counter mounting skepticism about its long-term viability.

Striking a tone that was both optimistic and defiant in his annual letter to shareholders released today, the billionaire hedge fund tycoon made his case for why the naysayers, who have predicted the retailer's demise for years, were wrong and why he's right -- or will be proven right at some future date.

Lampert noted adjusted EBITDA (earnings before interest, depreciation, taxation and amortization) in the fourth quarter rose to $125 million, which was the result of lower expenses reflecting his efforts to shrink the company. Moves such as spinning off preppy clothing brand Land's End and the sale of a significant stake of the chain's holdings in Sears Canada generated $1.4 billion and laid the groundwork for further improvements at the Hoffman Estates, Illinois, company, according to Lampert.

"We believe that our focus on profitability will contribute to a meaningful improvement in performance in 2015 and beyond, and we are seeing early signs of this progress as part of our most recent quarterly results," he wrote.

The results in the latest quarter, though, were pretty dismal. Sears reported a narrower loss of $159 million, or $1.50 per share, compared with a loss of $358 million, or $3.37 a share a year ago. But sales slumped 24 percent to $8.1 billion. Wall Street analysts were expecting a loss of $1.89 per share on revenue of $8.3 billion. Shares of the retailer closed nearly 5 percent lower on Thursday, down $1.85, to $36.05.

In the decade since Lampert orchestrated the merger of Sears Roebuck & Co. and Kmart Holdings, the company has had only one quarter of positive same-store sales, a key retail metric measuring activity at stores opened at least a year.

It was more of the same in the latest quarter, which showed a 4.4 percent same-store sales decline. As of the end of January, Sears had about $250 million in cash, down more than 70 percent over the past year. It also had about $800 million available on its credit line.

Howard Davidowitz, the head of the retail consultancy and investment bank Davidowitz & Associates, told CBS MoneyWatch he thinks Lampert can hang in there for another two to three years.

"He's burning through$2 billion in cash per year. Two billion ... and that number hasn't improved, it's gotten worse," he said, adding that he thinks a turnaround at Sears is doubtful.

Sears, not surprisingly, see things differently. A blog post written in December by CFO Robert Schriesheim argues that the retailer isn't as stressed financially as some may think. "Sears Holdings has demonstrated a consistent ability to generate liquidity from a variety of sources," he wrote.

Lampert also doesn't seem ready to throw in the towel. He closed 234 underperforming stores last year and plans to sell as many as 200 to form a real estate investment trust, a move Sears says will generate $2 billion in proceeds. Moreover, he says the chain's Shop Your Way loyalty program is resonating with consumers as are services such as enabling people to pick up their online purchases at a store.

"Transforming from a series of brick-and-mortar locations that sell products into an integrated retailer that builds relationships with our members and delivers seamless experiences hasn't been easy," Lampert wrote. "We've logged some successes and experienced setbacks. We've come far and are seeing signs of progress, but have a long way to go."

There's no arguing with Lampert's last statement.