Wal-Mart's profitable third quarter didn't satisfy Wall Street investors and another item noted in its earnings release has also raised concerns.
On Thursday, Wal-Mart posted net income of $3.635 billion, up 8.7% from a year ago when profits topped $3.344 billion. The numbers also relayed increases in sales and comp sales of existing stores.
Still, the investment community expected a stronger quarter and the company's stock price tumbled 4.5%.
Additionally, an item tucked inside Wal-Mart’s routine quarterly filing noted:
“Inquiries or investigations regarding allegations of potential Foreign Corrupt Practices Act (FCPA) violations have been commenced in a number of foreign markets where we operate, including but not limited to Brazil, China and India.”
Wal-Mart said it has incurred expenses of approximately $48 million in the recent quarter and $99 million during the past nine months relating to investigating and litigating the alleged bribery charges in its Mexican business unit.
Wal-Mart released the following statement regarding the broader investigation:
“Since the implementation of the global review and the enhanced anti-corruption compliance programs, the company has identified or been made aware of additional allegations regarding potential violations of the FCPA. When allegations are reported or identified, we, together with our third party advisors, conduct inquiries and when warranted, we open investigations
“We have inquiries or investigations regarding allegations of potential FCPA violations in a number of foreign markets where we operate regarding FCPA allegations, including but not limited to Brazil, China and India. This is in addition to the ongoing investigation in Mexico.
“As these matters are currently under review, it would be inappropriate for us to comment further on the specific allegations until we have concluded the investigations.
“We take compliance with the FCPA very seriously and are committed to having a strong and effective global compliance program in every country in which we operate. We will not tolerate noncompliance anywhere or at any level of the company. We are working diligently to strengthen our compliance programs and dedicating considerable resources to this effort. In fact, the company has spent more than $35 million on its global FCPA compliance review efforts over the past 18 months.”
Latest posts by Kim Souza (see all)
- NanoMech Celebrates A Company Milestone, Expands Headquarters - November 22, 2014
- Tyson Foods Boss Predicts 12% Earnings Growth In 2015 - November 19, 2014
- Lower Gas Prices, Millennials Boosting Tyson Foods Chicken Demand - November 17, 2014