Earnings: Wal-Mart | Home Depot

Wal-Mart Earnings Fall 26 Percent After Charge

BENTONVILLE, Ark. - (AP) - Wal-Mart Stores Inc. (WMT), the world's largest retailer, said Tuesday its second-quarter earnings fell 26 percent due to a charge related to the pending sale of its German operations, but results were still in line with expectations and the company reiterated guidance for the year.

For the quarter ended July 31, the company posted net income of $2.08 billion, or 50 cents per share, down from $2.81 billion, or 67 cents per share, a year ago. The latest quarter includes a hefty $863 million charge related to the sale of its German stores to rival Metro AG.

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Excluding its South Korea and German operations, the sales of which are both pending, Wal-Mart's income from continuing operations grew 5 percent to $2.98 billion, or 72 cents per share, from $2.85 billion, or 68 cents per share, a year ago.

Revenue totaled $85.43 billion, an increase of 11.4 percent from the $76.69 billion posted a year ago.

The earnings results were in line with Wall Street expectations for profit of 72 cents per share, though revenue came in below the $86.24 billion consensus estimate.

"Our sales and earnings from continuing operations for the quarter are up, and we continue to make progress on inventory," said Lee Scott, Wal-Mart Stores president and CEO. "Some of the same issues affecting our customers — higher utility costs and gas prices — are impacting many corporations, including Wal-Mart. We find it encouraging that we continue to grow market share in food and consumables during this time."

Total U.S. same-store sales for the quarter increased 1.7 percent, including a 1.5 percent increase for Wal-Mart Stores and a 2.6 percent increase for the company's Sam's Club stores.

Looking ahead, the company forecasts third-quarter earnings from continuing operations between 59 cents and 63 cents per share, compared with the average analyst estimate of 63 cents. For the year, Wal-Mart reiterated guidance for profit from continuing operations of $2.88 to $2.95 per share. Analysts are currently predicting earnings of $2.92 per share.

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Home Depot Profit Up 5.3 Percent

ATLANTA - (AP) - The Home Depot Inc. (HD), the nation's largest home improvement store chain, reported Tuesday a 5.3 percent jump in second-quarter earnings on a strong rise in sales. However, it said its earnings growth for the year will be at the low end of its previous guidance.

The results for the recent quarter beat Wall Street expectations, when a one-time tax charge is excluded.

The Atlanta-based company said it earned $1.86 billion, or 90 cents a share, for the three months ended July 30, compared with a profit of $1.77 billion, or 82 cents a share, for the same period a year ago.

Excluding the tax charge, Home Depot reported earnings of $1.93 billion, or 93 cents a share.

Analysts surveyed by Thomson Financial were expecting earnings of 92 cents a share in the second quarter.

Revenue in the second quarter rose 16.7 percent to $26.03 billion, compared with $22.31 billion recorded a year ago.

The company said it saw growth in average sales ticket across most merchandise categories. In the second quarter of fiscal 2006, Home Depot increased its average ticket by 4.2 percent to $59.98.

For the first six months of the year, Home Depot said it earned $3.35 billion, or $1.60 a share, compared with a profit of $3.02 billion, or $1.40 a share, for the same period a year ago. Six-month revenue rose 15 percent to $47.49 billion, compared with $41.28 billion recorded a year ago.

Home Depot said based on the current economic environment and its reinvestment program, the company believes its fiscal 2006 sales and earnings-per-share growth will be at the low end of its previous guidance. In January, it had said it expected full-year sales growth of 14 percent to 17 percent and full-year earnings growth of 10 percent to 14 percent.

Home Depot no longer reports same-store sales, a common retail measure that compares sales at stores open at least a year.

Home Depot operates 2,079 stores in the United States, Canada and Mexico.

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