By  on November 14, 2007

Wal-Mart Stores Inc. delivered earnings Tuesday ahead of Wall Street's analyst estimates while saying it was somewhat optimistic about the holiday season — despite economic pressures on consumers.

The results helped fuel an impressive rally on Wall Street. The Dow Jones Industrial Average soared 2.5 percent to 13,307.09. The S&P Retail Index surged 3.8 percent to close the day at 435.64. Shares of Wal-Mart gained 6 percent to $45.97.

For the three months ended Oct. 31, the retailer's net income rose 7.9 percent to $2.86 billion, or 70 cents a diluted share, from $2.65 billion, or 63 cents, in the same year-ago quarter. On a continuing operations basis, the company earned 70 cents a share versus 62 cents a year ago, beating Wall Street's consensus estimate of 67 cents.

Total revenues rose 8.9 percent to $91.95 billion from $84.47 billion, which included income from membership fees. Total sales gained 8.8 percent to $90.88 billion from $83.54 billion, which included a 6.4 percent jump in sales at Wal-Mart branded stores to $57.65 billion and a 1 percent comps gain.

For the nine months, net income rose 17.6 percent to $8.64 billion, or $2.11 a diluted share, from $7.35 billion, or $1.76 a share, last year. The company earned $2.14 a share from continuing operations, versus $1.97 a year ago. Total revenues jumped 8.7 percent to $271.37 billion from $249.57 billion. Sales at its stores were up 8.6 percent to $268.26 billion from $246.9 billion.

H. Lee Scott Jr., president and chief executive officer, told analysts during a conference call, that under the leadership of Eduardo Castro-Wright, president, executive vice president and ceo of the Wal-Mart Stores Division, the company sees improving trends in its apparel business.

Castro-Wright told analysts that operating income at Wal-Mart's U.S. division increased 11.1 percent to more than $4 billion. Charles M. Holley Jr., executive vice president for finance and treasurer, said international sales from continuing operations were $22.4 billion, up 16.9 percent over the prior year. He noted that Asda in the U.K. delivered "very positive sales results for the quarter."

Wal-Mart estimated that same-store sales would be up from flat to 2 percent in the fourth quarter, with earnings per share from continuing operations between 99 cents and $1.03. Full-year EPS from continuing operations is expected to be between $3.13 and $3.17, which includes an anticipated restructuring charge for Seiyu of $40 million after tax in the fourth quarter.

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus