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Wal-Mart earnings meet expectations

Wal-Mart Stores Inc., the world's largest retailer, reported a 12.7 percent rise in its third-quarter earnings, meeting Wall Street expectations.
/ Source: The Associated Press

Wal-Mart Stores Inc., the world’s largest retailer, reported a 12.7 percent rise in its third-quarter earnings, meeting Wall Street expectations.

The retail giant said Tuesday it earned $2.29 billion, or 54 cents a share, for the three months ended Oct. 31, up from $2.03 billion, or 46 cents a share, a year ago.

Overall revenue including net sales and other income rose to $69.26 billion, up from $63.04 billion a year earlier.

Analysts surveyed by Thomson First Call projected the company would earn 54 cents per share.

In a conference call, Wal-Mart raised its earnings outlook for the full year to a range of $2.39 to $2.41 a share and offered a fourth-quarter earnings estimate of to 73 cents to 75 cents a share. Previously, the company had forecast annual earnings of between $2.34 and $2.38 per share. Analysts already expected earnings of 74 cents a share for the fourth quarter and $2.40 a share for the year.

Wal-Mart president and chief executive Lee Scott has long complained about higher fuel prices pressuring low-income consumers but said Tuesday that things are looking up.

“The economy continues to improve and we are well positioned for the holidays,” Scott said.

Scott said he wasn’t satisfied with profit margins and sales growth in the Wal-Mart division. But he said executives believe the company will have a strong finish to its fiscal year.

“I believe sales momentum will accelerate into the holidays,” Scott said in a recorded call. “We should have a better Christmas than last year.”

Among the pressures on profit margins are higher labor, health insurance, utilities, fuel and accident costs, the company said.

The company said that sales at stores open at least a year increased by 1.7 percent across Wal-Mart’s U.S. divisions. The Wal-Mart division, which includes discount stores, Supercenters and Neighborhood Market grocery stores, showed a same-store sales increase of 1.3 percent. The Sam’s Club warehouse store division had a same-store gain of 4.0 percent for the quarter.

Sales rose 18.0 percent in the international division. Wal-Mart division sales rose 8.3 percent, and Sam’s Club sales were up 5.5 percent.

For the first nine months of the year, Wal-Mart earned $7.10 billion, or $1.66 a share, versus $6.33 billion, or $1.44 a share, a year earlier. Nine-month revenue rose to $205.17 billion from $183.49 billion a year ago.