Walmart’s Disappointments are in the Earnings Details

WalMart (NYSE:WMT) reported third quarter results with net sales rising 8.2% to 109.5 billion. Earnings were $3.34 billion (97 cents a share) compared to $3.44 billion (95 cents a share) a year ago. The company had estimated earnings to come in at 95 cents to $1.00 a share, whereas analysts had estimated 98 cents. Key U.S. sales numbers rose higher for the first time in two years. U.S. discount store sales were up, ending a run of nine quarterly declines, whereas same store sales were up for the fourth month in a row.

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However, WalMart (NYSE:WMT) was unable to pass on rising grocery costs to its customers as it hoped to attract cost-conscious shoppers in a dismal job market and shaky economy. “They were clearly being aggressive in pricing and gaining share, but they didn’t get the leverage on the cost side,” said ITG Investment Research analyst John Tomlinson. The company also incurred higher overheads and expenses totaling $536 million, up 40.7%, relating to its thrust on e-commerce.

For the fourth quarter, WalMart (NYSE:WMT) appears to be well-positioned, offering layaway schemes after many years, advertising lower prices, and will start its big sales at 10 p.m. on Thanksgiving. The company expects to earn $1.42 to $1.48 per share against an average analyst estimate of $1.45, in the fourth quarter.

Here’s how Walmart shares are reacting:

  • Wal-Mart Stores Inc. (NYSE:WMT): The shares recently traded at $57.37, down $1.52, or 2.58%. Its market capitalization is $197.74 billion. They have traded in a 52-week range of $48.31 to $59.40. Volume today was 10,437,971 shares versus a 3-month average volume of 13,239,600 shares. The company’s trailing P/E is 12.21, while trailing earnings are $4.70 per share. The company pays a dividend of $1.46 per share for a dividend yield of 2.50%. About the company: Wal-Mart Stores, Inc. operates discount stores, supercenters, and neighborhood markets. The Company’s discount stores and supercenters offer merchandise such as apparel, housewares, small appliances, electronics, and hardware. Walmart’s markets offer a full-line supermarket and a limited assortment of general merchandise. The Company operates nationally and internationally. Get the most recent company news and stock data here >>

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