Wal-Mart's earnings down 7.4%, but beat expectations

NEW YORK -- The company also said first-quarter earnings could miss Wall Street expectations.

The Bentonville, Ark.-based discounter earned $3.79 billion, or 96 cents a share in the quarter ended Jan. 31. That compares with $4.096 billion, or $1.02 a share, a year earlier.

Analysts surveyed by Thomson Reuters had expected the company to earn 99 cents a share, excluding the after-tax charge for the settlement announced in December of 63 class-action wage and hour lawsuits. Excluding the impact of that, Wal-Mart earned $1.03 a share.

Total sales rose to $109.12 billion from $107.34 billion a year earlier. Analysts expected $109.1 billion. Sales at stores open at least a year rose 2.8% in the quarter. Same-store sales are considered a key indicator of retailer's health.

During the quarter, Wal-Mart's U.S. sales rose 6% to $71.46 billion, while its Sam's Club warehouse division saw sales virtually flat at $11.84 billion.

Sales fell 8.4% to $24.7 billion at the company's important international division, hurt by the lower value of currencies against the strengthening dollar. On a constant currency basis, international sales rose 9% in the fourth quarter, the company said.

Wal-Mart has been one of the few bright spots in retailing as it benefits from shoppers looking for cheaper options and focusing on necessities during the recession. But it is now being forced to adjust to the deteriorating economy — announcing last week that it will cut up to 800 jobs at its headquarters as it makes changes, including cutting the number of stores it will build this year. It's also cutting inventory.

The company now expects earnings for the fiscal first quarter of 72 cents to 77 cents a share. Analysts project 77 cents a share. For the full fiscal year, Wal-Mart expects a profit of $3.45 a share to $3.60 a share. Analysts expect $3.59.