Wal-Mart Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Wal-Mart Stores (NYSE:WMT) will unveil its latest earnings on Thursday, November 15, 2012. Wal-Mart Stores operates Walmart discount stores, supercenters, Neighborhood Markets and Sam’s Club locations in the United States.

Wal-Mart Stores Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.07 per share, a rise of 10.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from $1.05. Between one and three months ago, the average estimate moved up. It has risen from $1.06 during the last month. Analysts are projecting profit to rise by 9.6% versus last year to $4.92.

Past Earnings Performance: The company has beaten estimates the last two quarters and is coming off a quarter where it topped the forecasts by one cent, reporting profit of $1.18 per share against a mean estimate of net income of $1.17. In the first quarter, the company exceeded forecasts by 5 cents with profit of $1.09 versus a mean estimate of net income of $1.04.

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A Look Back: In the second quarter, profit rose 5.7% to $4.02 billion ($1.18 a share) from $3.8 billion ($1.09 a share) the year earlier, exceeding analyst expectations. Revenue rose 4.5% to $114.3 billion from $109.37 billion.

Stock Price Performance: Between October 12, 2012 and November 9, 2012, the stock price dropped $3.54 (-4.7%), from $75.81 to $72.27. The stock price saw one of its best stretches over the last year between July 2, 2012 and July 13, 2012, when shares rose for nine straight days, increasing 5.5% (+$3.83) over that span. It saw one of its worst periods between September 24, 2012 and September 28, 2012 when shares fell for five straight days, dropping 1.3% (-94 cents) over that span.

Wall St. Revenue Expectations: On average, analysts predict $115.04 billion in revenue this quarter, a rise of 4.4% from the year-ago quarter. Analysts are forecasting total revenue of $473.01 billion for the year, a rise of 5.8% from last year’s revenue of $446.95 billion.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 8.1% in the third quarter of the last fiscal year, 5.9% in the fourth quarter of the last fiscal year and 8.5% in the first quarter before increasing again in the second quarter.

Heading into this earnings announcement, net income has dropped 0.5% on average for the last four quarters.

Analyst Ratings: There are 11 out of 21 analysts surveyed (52.4%) rating Wal-Mart Stores a buy. Over the past 90 days, the average rating for the stock has moved up from hold to moderate buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.82 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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