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Tickers in this Article: WMT
Wal-Mart Stores (NYSE:WMT) announced its results for the most recent quarter on August 16, 2012. Wal-Mart Stores operates Walmart discount stores, supercenters, Neighborhood Markets and Sam's Club locations in the United States.

Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: How To Decode A Company's Earnings Reports

The Numbers: Wal-Mart Stores managed to exceed estimates with stronger-than-expected EPS and revenues. The company reported $1.18 per share versus the $1.17 per share estimate and revenues of $114.3 billion versus the $110.5 billion estimate. EPS rose 8.3% while revenue climbed 4.5% from the same period last year. Wal-Mart Stores' revenue has grown during each of the past four quarters on a year-over-year basis. Wal-Mart Stores reported net income of $4.02 billion during the second quarter. According to the reported number, this is up 5.7% from last year's figures.

Management Quote: "Walmart had a strong second quarter, and I'm pleased with the earnings and overall results," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "We had positive comp sales in Walmart U.S. and Sam's Club, as well as each of our International markets, reinforcing that customers rely on Walmart to help them save money and live better."

A Look Back: Gross margin shrank 0.2 percentage point to 25.1%. The contraction appeared to be driven by increased costs, which rose 4.8% from the year earlier quarter while revenue rose 4.5%.

Net income has increased 0.8% year-over-year on average across the last five quarters. The biggest gain came in the first, when income climbed 10.1% from the year-earlier quarter.

Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. Over the past three months, the average estimate for the fiscal year has climbed from $4.85 per to share to $4.90.

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