Wal-Mart results fall short
Wal-Mart Stores Inc., the world’s largest retailer, said Tuesday its fourth-quarter earnings rose 13.4 percent after aggressive holiday advertising helped boost sales by 8.6 percent.
But Wal-Mart shares slipped as the retailer’s fourth-quarter revenue fell short of Wall Street projections, and it also forecast a profit outlook that is below Wall Street projections. Wal-Mart’s shares fell 8 cents to close at $24.51 on the New York Stock Exchange.
Net income rose to $3.6 billion, or 86 cents per share, for the quarter ended January 31 from $3.2 billion, or 75 cents per share, a year ago.
Earnings in the latest quarter included a $103 million net tax benefit that boosted net income by 2 cents per share.
The Bentonville, Ark.-based retailer last month said it expected earnings at the low end of a range of 82 cents to 86 cents per share. Analysts surveyed by Thomson Financial had projected earnings of 83 cents per share.
Wal-Mart reported total fourth-quarter net sales of $89.3 billion and total revenue of $90.1 billion. Analysts expected revenue of $90.4 billion.
“US Airways Group Inc. blamed high fuel prices for its quarter-billion dollar loss in the fourth quarter. But the company’s CEO said the task of merging US Airways and America West was going smoothly, and he predicted the nation’s fifth-largest carrier would be profitable on an operating basis in 2006.
The loss for the quarter ended in December was $261 million compared with $69 million a year earlier. However, the per-share loss narrowed to $3.26 from $4.66, as the latest period had a greater number of shares outstanding.
Excluding certain items, the company reported a fourth-quarter loss of $138 million, or $1.72 per share, versus an adjusted net loss of $58 million, or $3.89 per share, in the fourth quarter of 2004.
Quarterly revenue rose to $2.58 billion from $697 million, while operating expenses climbed to $2.77 billion from $748 million.
The former US Airways Group Inc. and America West Holdings Group Inc. merged on Sept. 27, 2005, and year-earlier results include only America West.
“It looks like they’re making real good progress” on the merger, said Calyon Securities analyst Ray Neidl. “They’ll make money this year of anywhere from zero to a hundred million even at current fuel prices, excluding the one-time merger costs.”
“The Home Depot Inc., the nation’s largest home improvement store chain, reported Tuesday a more than 23 percent jump in fourth-quarter profit on strong sales and reiterated that it expects to see continued growth in 2006.
The results beat Wall Street expectations, and Home Depot shares initially rose sharply before dropping off as the overall market fell on a surge in oil prices.
The Atlanta-based company said it earned $1.29 billion, or 60 cents a share, for the three months ending Jan. 29, compared to a profit of $1.04 billion, or 47 cents a share, for the same period a year ago.
Analysts surveyed by Thomson Financial were expecting earnings of 56 cents a share in the fourth quarter.
“Moody’s Investors Service lowered General Motors Corp.’s debt rating further into “junk” territory Tuesday, citing uncertainty the company can establish competitive wages and benefits without filing for bankruptcy protection.
Moody’s lowered GM’s $30 billion in debt one level to B2 from B1, five rungs below investment grade. It also assigned the company a negative outlook, actions that will make it harder for the world’s largest automaker to borrow money. Moody’s had placed GM under review for a possible downgrade on Jan. 26.
The credit agency didn’t take any action on GM’s finance arm, General Motors Acceptance Corp. GM is trying to sell a majority stake in GMAC in order to boost its credit ratings.
“Federated Department Stores Inc. said Tuesday its fourth-quarter income rose 59 percent, aided by the acquisition of former rival May Department Stores Co. The department-store giant also backed its full-year financial forecast.
For the quarter ended Jan. 28, the parent of Macy’s and Bloomingdale’s reported net income of $699 million, compared with $440 million a year ago. Per-share earnings fell to $2.52 from $2.55, reflecting a hefty increase in the company’s share count.
Stripping out costs related to the May acquisition totaling $82 million, or 29 cents per share, Federated reported earnings from continuing operations of $2.74 per share. Revenue totaled $9.57 billion, up from $5.12 billion a year ago.
Wall Street had forecast a profit of $2.62 per share, the average estimate of 11 analysts surveyed by Thomson Financial, on projected sales of $9.42 billion.
Sales at stores open at least one year — a key indicator of a retailer’s strength — rose 1.1 percent.