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Wal-Mart, the world's largest retailer, posted fourth-quarter earnings Thursday that beat Wall Street expectations, suggesting the profit-sapping impact of holiday discounting was less than some analysts feared.
Wal-Mart said its profits rose 16.2 per cent for the November-January period, beating Wall Street forecasts by a penny a share. Its earnings for the full year topped $10 billion for the first time.
Lee Scott, Wal-Mart's president and chief executive, acknowledged in a prerecorded call that the company made some mistakes. But he did offer a bullish outlook for 2005 for his company's prospects based on an expectation that the economy will continue to improve.
Wal-Mart earned $3.2 billion, or 75 cents a share, for the three months ended January 31, up from $2.7 billion, or 63 cents a share, a year ago. Wal-Mart's overall revenue rose 10.4 per cent to $83.0 billion from $75.2 billion a year earlier.
For the year, Wal-Mart earned $10.3 billion, or $2.41 a share, up from $9.1 billion, or $2.07 a share, a year earlier. The company had overall revenue of $288.2 billion for the year, up from $258.7 billion a year earlier.
Wal-Mart's shares rose 12 cents to $52.72 Thursday.
Wireless provider Nextel, which has agreed to be acquired by Sprint, reported a 26 per cent drop in fourth-quarter earnings on higher tax expenses Thursday, but still outperformed Wall Street estimates.
The company reported a $232 million income tax provision in the fourth quarter, nearly $200 million more than the tax liability in the year-ago quarter.
As a result, the company earned $468 million, or 41 cents a share in the just-completed quarter, compared to a $631 million, or 55 cents per share, profit in the year-ago quarter.
Still, the 41-cent per-share earnings, beat the estimate of Wall Street analysts, who predicted 39 cents.
Quarterly revenue increased 19 per cent, thanks in part to a record increase in subscribers. The company added 955,000 subscribers in the quarter, including 595,000 to its flagship Nextel brand and 360,000 to its prepaid Boost Mobile Service.
The company increased its subscriber base 22 per cent in 2004, from 13.3 million at the end of 2003 to 16.2 million at the end of 2004.
For the year, profits doubled, from $1.45 billion, or $1.34 a share, in 2003 to $3.0 billion, or $2.62 a share, in 2004.
Nextel shares fell 59 cents, or 2 per cent, to close at $28.59 Thursday. — Internet
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