Wal-Mart?s Income Rose 12.7 Percent In Third Quarter

Wal-Mart Stores Inc. said fiscal third-quarter net income grew 12.7 percent, in line with its most recent estimate, although sales were shy of expectations. The company also raised its full-year earnings forecast.

Bentonville-based Wal-Mart reported net income of $2.29 billion, or 54 cents a share, for the quarter ended Oct. 31, compared with $2.03 billion, or 46 cents a share, for the comparable quarter of the previous year.

Earlier in November, Wal-Mart, the world’s largest company by revenue, said it expected to report quarterly earnings at the high end of its original projection of 52 cents to 54 cents per share. The company on Nov. 16 cited better-than-expected gross margin and a change in the effective tax rate, but sales were below its original plan.

Net sales climbed 9.7 percent to $68.52 billion, falling short of a mean estimate of $69.22 billion from analysts surveyed by Thomson First Call. Revenue, which includes net sales and other income such as building rentals, rose 9.9 percent to $69.26 billion.

In a prerecorded call outlining third-quarter results, Lee Scott, Wal-Mart’s president and CEO, said sales were “lower than we are satisfied with,” with the company’s namesake Wal-Mart stores turning in a “particularly poor” performance.

Wal-Mart stores generated sales of $45.89 billion, up 8.3 percent from a year earlier, while sales at Sam’s Club stores climbed 5.5 percent to $9.08 billion. International sales jumped 18 percent to $13.55 billion, with Mexico posting especially strong results.

Sales in U.S. stores open at least a year edged up only 1.7 percent. Comparable-store sales rose 4 percent at Sam’s Club and 1.3 percent at Wal-Mart stores. Scott said higher oil prices hurt comps for the quarter.

Scott said Wal-Mart remains optimistic about the upcoming holiday shopping season as the economy continues to improve and oil prices stabilize.

For the fiscal year ending Jan. 31, 2005, Wal-Mart raised its earnings outlook to a range of $2.39 to $2.41 a share. Its previous outlook was $2.36 to $2.40 per share.

The latest projection assumes comparable-store sales growth of 2 percent to 4 percent in the fourth quarter, the company said in its conference call. Wal-Mart said it expects fourth-quarter earnings of 73 cents to 75 cents a share, in line with a mean estimate of 74 cents a share from analysts surveyed by First Call.