Wal-Mart’s 3Q profits beat estimates; revenue falls short

Prior to the second quarter, Walmart’s e-commerce growth had been shrinking for two years.

Wal-Mart’s shares were down about 3% in premarket trading Thursday, at $69.21, in a 52-week range of $58.32 to $75.19.

Charlie O’Shea, lead retail analyst at Moody’s, said Wal-Mart is poised for strong holiday sales in the fourth quarter as the company “leverages its store network to handle online orders, especially via its buy online/pick up in store capability, as well as increasing benefits from Jet.com”.

Results: Earnings fell 1% to 98 cents a share.

However, the figure declined 4.9% from the year-ago earnings from continuing operations of $1.03 per share. Twenty-one of the 34 analysts who cover Walmart and are tracked by Bloomberg rate the stock a “hold”. Analysts had expected $4.34. Long term growth estimate is on Wal-Mart Stores, Inc.is $5.2825. On a constant currency basis, total revenue was $120.3 billion, an increase of 2.5%. E-commerce growth accelerated again, rising 20.6% globally, with the USA outperforming other major markets.

“E-commerce was a highlight”, Biggs said in an interview. Excluding a lease accounting benefit from a year ago, operating income declined 7.9 percent. Excluding this gain, consolidated operating income fell 7.9% as the company continued to invest in people and technology.

At Wednesday’s close, Wal-Mart’s shares had risen more than 16 percent since the start of the year. This was the ninth consecutive quarter of positive comps. They are projecting Next Quarter growth of -10.7%. Lower fuel prices benefited consumers and the impact was seen in improved traffic during the quarter. Sales growth past 5 years was measured at 2.70%. Overseas, the strong dollar weighed on sales, turning a 2.4 percent increase at its worldwide unit into a 4.8 percent decline. The firm past twelve months price to sales ratio was 0.96 and price to cash ratio remained 41.69. The Next Day Volume after Earnings was reported as 26.86 Million. Wall Street was expecting an increase of 1.3%. In simple parlance, comps is the sales from a company’s stores that have been open for over a year. Wal-Mart said it’s setting up teams to accelerate the integration between Wal-Mart and Jet.com and working to use its scale in areas like shipping and sharing its product selection. Currently, the dividend paid out is $0.50 on a quarterly basis. Also, last quarter’s EPS stood at $1.07. In Wal-Mart Stores, Inc. Analysts estimated about 96 cents, according to data compiled by Bloomberg.

The company also raised the low end of its fiscal-year profit forecast, in line with Target Corp and other rivals that expressed optimism ahead of the holiday shopping season. The company expects EPS to come in between 32-35 cents.

The intense high range is put at $70 while the lowest price is $46. However, on the Zacks Rank front, things are pretty mixed, as the stock has a Zacks Rank #3 (hold), but it was a “sell” within the past week.

Pier 1 Imports, Inc. Firm’s yearly sales growth for the past five year was 2.70%.