Wal-Mart quarterly income up 3.1%

Bentonville-based Wal-Mart Stores Inc. reported Tuesday (May 17) first-quarter net income of $3.55 billion, up 3.1% over the 2010 period thanks in large part to growth in international sales and Sam’s Club sales.

The per share income of 98 cents pushed through the 95 cents per share average of estimates from market analysts.Total revenue for the first quarter period ended April 30 was $104.189 billion, up 4.4% over the 2010 period.

But the Walmart U.S. division of the global retail giant continues to struggle, posting its eighth consecutive quarterly decline in comparable store sales.

Walmart U.S. net revenue was $62.669 billion, up 0.6% compared to the 2010 period. Walmart International revenue of $27.905 billion was up 11.5%, and Sam’s Club revenue of $12.481 billion was up 9.4%.

Comparable sales — sales in stores open a year or more — for Walmart U.S. were down 1.1%, an improvement over the 1.4% decline in the first quarter of 2010. Wal-Mart Stores President and CEO Mike Duke praised the small gains made in the company’s largest segment.

“Walmart U.S. comp sales for the first quarter were within our guidance range,” Duke said in the earnings statement. “We recognize we still have work to do and comp sales growth remains the greatest priority for me and the entire Walmart U.S. team. The good news is that the plan Bill Simon and his team are executing is gaining traction. We’re focused on delivering every day low price and a wide assortment.”

Operating income in the three segments are as follows.
• Walmart U.S.: $4.65 billion, up 0.8%
• Walmart International: $1.096 billion, up 1.2%
• Sam’s Club: $459 million, up 7%

International sales continue to be strong, but a $49 million currency exchange rate gain prevented a segment income decline of 3.3%. Also, Walmart Japan posted a $51 million charge for casualty losses related to the March 11 earthquake and tsunami.

“International remains the key growth driver for our company, and the segment is seeing continued growth through a combination of comp sales and new stores,” Duke said in the statement. “Mexico, China and Chile had the highest percentage sales increases for the first quarter compared to last year.”

South Africa may be part of the company’s international segment. Wal-Mart has bid $2.4 billion on a 51% share of Massmart, the largest retailer in the country. However, South African officials may impose restrictions on the deal, to include rehiring previously laid off Massmart employees and requiring Wal-Mart to purchase a certain percentage of goods from South African vendors. Wal-Mart officials have said they may withdraw the bid if the restrictions are imposed.

Wal-Mart officials also set second quarter per share earnings guidance in the $1.05 to $1.10 range, well above the 97 cents per share reported in the 2010 period. The early average estimate of analyst estimates predicts second quarter income of $1.08 per share.

Wal-Mart Stores operates 9,029 retail units under 60 different banners in 15 countries. With fiscal year 2011 sales of $419 billion, the company employs more than 2 million people worldwide.

Wal-Mart shares (NYSE: WMT) were set to open Tuesday at $56.06. During the past 52 weeks, the share price has ranged from a $57.90 high to a $47.77 low.