Wal-Mart Stores Earnings: Here’s Why the Stock is Falling Now

Wal-Mart Stores Inc. (NYSE:WMT) delivered a profit and met Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.11%.

Wal-Mart Stores Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 5.93% to $1.25 in the quarter versus EPS of $1.18 in the year-earlier quarter.

Revenue: Rose 1.68% to $116.22 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Wal-Mart Stores Inc. reported adjusted EPS income of $1.25 per share. By that measure, the company missed the mean analyst estimate of $1.25. It missed the average revenue estimate of $118.47 billion.

Quoting Management: “We delivered a solid increase in earnings per share for the second quarter,” said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. “Consolidated net sales and our Walmart U.S. comp were below expectations. While the retail environment was challenging across all of our markets, the Walmart U.S. and Sam’s Club businesses improved comp sales from the first quarter, and the growth of International sales was consistent.
“I’m encouraged by our position to execute in the second half of the year, particularly with the steps we’re taking to improve performance,” said Duke. “There are areas of our business where we can do a better job, and we will. I’m confident in our associates’ abilities to deliver for our customers with EDLP and for shareholders with improved expense savings.”

Key Stats (on next page)…

Revenue increased 1.78% from $114.19 billion in the previous quarter. EPS increased 9.65% from $1.14 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $1.17 and has not changed. For the current year, the average estimate has moved down from a profit of $5.31 to a profit of $5.3 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)