Wal-Mart Stores Inc. (WMT), the world's largest retailer, announced Thursday it posted a 16.2 percent increase in profits for its fourth quarter, beating Wall Street expectations. Its earnings for the full year topped $10 billion for the first time.

Wal-Mart president and chief executive Lee Scott called it a solid performance but added "we can do better."

The Bentonville-based retailer earned $3.16 billion, or 75 cents a share, for the three months ended Jan. 31, up from $2.72 billion, or 63 cents a share, a year ago. Wal-Mart's overall revenue rose to $83.02 billion from $75.19 billion a year earlier.

The latest earnings results beat expectations of 74 cents per share by analysts surveyed by Thomson First Call.

During the quarter, the company struggled with its early holiday sales and changed its advertising strategy after post-Thanksgiving sales (search) numbers were flat. Sales picked up after Wal-Mart cut prices on some select popular products and began advertising specific bargains, a shift from its emphasis on the overall shopping experience.

For the year, Wal-Mart earned $10.27 billion, or $2.41 a share, up from $9.05 billion, or $2.07 a share, a year earlier. The company had overall revenue of $288.19 billion for the year, up from $258.68 billion a year earlier.

The company saw sales at U.S. stores open at least a year rise 1.5 percent in the quarter and 3.3 percent for the fiscal year. That was at the low end of Wal-Mart's projection of gains of between 3 percent and 5 percent at the start of the year.

Its shares rose 28 cents to $52.80 on the New York Stock Exchange (search), but are closer to their 52-week low of $51.08 than their high of $61.31.

Wal-Mart chief financial officer Tom Schoewe said earnings per share for the company's first quarter are expected to come in between 56 cents and 58 cents. For the fiscal year, Schoewe said he expects per-share earnings to be between $2.70 and $2.74.

Analysts polled by Thomson First Call expect 58 cents per share for the first quarter, and $2.73 for the year.

"In the year just completed, we added almost $29 billion in sales and topped $10 billion in net income for the first time in our history. It was a solid performance, but we can do better," Scott said.

Scott said he expects improved results for the current fiscal year.

Both Scott and Schoewe said for investors they expect oil prices to stabilize and the economy to continue to improve as the year progresses. Scott said improvement in employment and real income will translate to improved sales at Wal-Mart.

In the just-concluded fourth quarter, Scott said the company should have made some different moves.

"We were not aggressive enough in our merchandising plan," Scott said. "We would have been better off if we had traded lower markdowns for sales."

Scott said the company is making changes, though Wal-Mart still faces pressure from health insurance and other costs.