By  on February 21, 2007

Wal-Mart Stores Inc. posted fourth-quarter earnings that beat analysts' expectations as international growth and a $98 million net tax benefit bolstered results.

Wal-Mart's performance buoyed stock trading in Tuesday's afternoon session. At the bell, the Dow Jones Industrial Average closed up 0.2 percent to 12,786.64 while shares of Wal-Mart rose 3.7 percent to $50.26.

For the three months ended Jan. 31, the retailer's net income rose 9.8 percent to $3.94 billion, or 95 cents a diluted share, from $3.59 billion, or 86 cents, in the same year-ago quarter. Total revenues climbed 11 percent to $99.08 billion from $89.25 billion, which included a sales gain of 10.9 percent to $98.09 billion from $88.42 billion last year. Analysts had the company pegged to earn 90 cents, according to Thomson Financial.

"Our customers benefited from low prices around this world. It is a reaffirmation of the proposition that is synonymous with Wal-Mart: saving people money so they can live better," said H. Lee Scott, president and chief executive officer, during a taped earnings conference call.

Scott said the company's international segment had a "phenomenal quarter, driven by a tremendous performance in Mexico, solid sales in Canada and continued improvements in the U.K., and we're seeing solid results in markets like Argentina, Brazil and China."

Earnings were helped by a $98 million, or 2 cents a share, net tax benefit. Excluding the tax benefit, Wal-Mart would have still beat Wall Street's consensus estimate. Total U.S. same-store sales for the quarter rose 1.6 percent, with a 1.3 percent increase for Wal-Mart Stores and a 3.1 percent gain for Sam's Club. While Wal-Mart's domestic stores under the Wal-Mart brand posted an operating income gain of 11.3 percent, and Sam's Club came in with a 15.4 percent rise, it was the international businesses that reported the greatest gain, at 32 percent, in operating income from continuing operations. Operations in South Korea and Germany were shed during the third quarter of fiscal year 2007.

For the year, net income was essentially flat, rising just 0.5 percent to $11.28 billion, or $2.71 a diluted share, from $11.23 billion, or $2.68, a year earlier. Total revenues rose 11.7 percent to $348.65 billion from $312.1 billion, which included an 11.7 percent sales gain to $344.99 billion from $308.95 billion. Total U.S. comps rose 2.1 percent, with Wal-Mart up by 1.9 percent and Sam's Club gaining 2.9 percent.

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