Wal-Mart Q3 profit up but shares slide

NEW YORK: Wal-Mart reported a 9 percent increase in third-quarter net income as the world's largest retailer continues to woo back shoppers by reemphasizing low prices. But momentum has slowed as it grapples with an uncertain global economy.
The Bentonville, Arkansas, discounter issued a fourth-quarter profit outlook that fell short of Wall Street expectations and shares slid nearly 5 percent in early trading. Revenue at stores open at least a year, a figure that measures growth in established stores, also disappointed.
Wal-Mart's stock fell $3.31 to $68 in early trading. Over the past 52 weeks, share have been trading anywhere from $56.26 to $77.60. And a bribery investigation that began in Mexico may be spreading.
In a filing with the US Securities and Exchange Commission, Wal-Mart said yesterday that it was looking into potential violations related to the Foreign Corrupt Practices Act in Brazil, China and India as well.
Wal-Mart is considered an economic bellwether because the retailer accounts for nearly 10 percent of nonautomotive retail spending in the US. The company's latest results underscore how low-income shoppers are struggling, stretching every dollar until the next payday.
Wal-Mart has been able to turn around its US business by fixing the mistakes it made in merchandising and pricing. It's hammering its low price message again. It's also returned thousands of items to its shelves after a campaign to reduce clutter in its stores backfired.
The company earned $3.63 billion, or $1.08 per share, in the quarter ended Oct. 31. That compares with $3.33 billion, or 96 cents per share, in the year-ago period.
Net sales, excluding Sam's Club membership fees, rose 3.4 percent to $113.2 million.

Analysts were expecting $1.07 per share on revenue of $114 billion.
Wal-Mart says revenue at stores opened at least a year rose 1.5 percent for its namesake US business, below Wall Street's estimate of 1.8 percent. That's the division's fifth straight quarterly gain after posting nine straight quarters of declines. But the figure represents a slowdown from the 2.2 percent growth in the second quarter and a 2.6 percent increase in the first quarter.
For the entire US business, the measure rose 1.7 percent, including a 2.7 percent rise at Sam's Clubs.
Revenue for Wal-Mart's US business, which accounts for about 60 percent of the company's total business, rose 3.6 percent to $66.1 billion, while revenue at Sam's Club rose 4.7 percent to $13.9 billion. Revenue at its international division, which accounts for about a quarter of Wal-Mart's total revenue, rose 4.7 percent. That marked a slowdown from the previous quarter.
Wal-Mart narrowed its full-year earnings guidance and issued a fourth-quarter profit outlook that below most analyst forecasts.
It now expects earnings per share for the full year to be between $4.88 per share and $4.93 per share. It originally expected earnings per share of $4.83 to $4.93. For the fourth quarter, it expects earnings per share to be $1.53 per share and $1.58 per share. Analysts had expected $1.59 per share.