Why Wal-Mart (WMT) Is Lower on Thursday
NEW YORK (TheStreet) -- Wal-Mart
By early afternoon, shares had taken off 1.9% to $73.44.
Management issued lower-than-expected fiscal net income between $5.10 and $5.45 a share, lower than analyst consensus of $5.54 a share, according to Thomson Reuters. The company expects net sales to grow at the low-end of a 3% to 5% forecast.
In the three months to January, the world's largest retailer reported a 21% decline in reported net profit to $4.4 billion. Net income of $1.60 a share dropped from $1.67 a share in the year-ago quarter.
Comparable store sales in U.S. stores dropped 0.4% over the quarter, a result blamed on winter storms and a reduction in the government's food-stamp program, the Supplemental Nutrition Assistance Program (SNAP).
However, the Bentonville, Ark.-based business managed to grow overall revenue by 1.4% to $128.79 billion.
Analysts surveyed by Thomson Reuters had forecast fourth-quarter net income of $1.59 a share and revenue of $130 billion.
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TheStreet Ratings team rates WAL-MART STORES INC as a Buy with a ratings score of A-. The team has this to say about their recommendation:
"We rate WAL-MART STORES INC (WMT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, growth in earnings per share, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
- You can view the full analysis from the report here: WMT Ratings Report