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Wal-Mart (WMT) Q3 Misses on Bottom Line as Top Line Surges, Sees Q4 Comps Flat to Up 2%

November 15, 2011 8:01 AM EST
Wal-Mart Stores (NYSE: WMT) posted third-quarter earnings Tuesday morning which came within its guidance but fell just shy of Wall Street expectations. Sales at the world's largest retailer easily topped views. The company sees flat to modest growth at its U.S. Wal-Mart stores in the all-important fourth quarter.

The retailing giant reported third-quarter earnings of $0.97 per share, up from $0.95 last year but below the $0.98 Wall Street consensus by a penny.

On the top line, Wal-Mart reported net sales including fuel rose 8.2 percent to $109.5 billion. Total revenue was $110.23 billion, versus the consensus estimate of $107.98 billion.

Walmart International posted strong results, with net sales rising approximately 20 percent to $32.4 billion during the quarter.

Comparable-store sales rose 1.3 percent at Wal-mart U.S during the third quarter. Excluding fueld, Sam's Club comparable-store sales rose 5.7 percent. Total U.S.comparable-store sales ex-fuel were up 1.9 percent.

Walmart had positive free cash flow of $3.4 billion, versus $2.9 billion during the year-ago quarter.

During the quarter the company repurchased $1.4 billion worth of shares and paid dividends of $1.3 billion.

"Every business segment is stronger today than it was a year ago, and we delivered solid earnings growth for our shareholders in the third quarter," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "Both Walmart U.S. and Sam's Club exceeded comp sales guidance, and I'm pleased that the sales momentum positions us exceedingly well for the holidays. We also are pleased with the growth in both sales and operating income for Walmart International."

Mr. Duke said the economy continues to weigh on Walmart U.S. customers and they are continuing a strategy of investing in low prices for the holidays.

Looking toward the fourth quarter, Wal-Mart Stores sees EPS of $1.42-$1.48, versus the consensus of $1.45. Walmart U.S. expects comparable-store sales to increase from flat to two percent in the fourth quarter.

For the full year, the company sees EPS of $4.45-$4.51, versus the consensus of $4.49.


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