Wal-Mart Q2 Results Top Estimates; Lifts FY17 Adj. Earnings View

(RTTNews) - Retail giant Wal-Mart Stores Inc. (WMT) reported Thursday higher profit in its second quarter with slight increase in revenues. Adjusted earnings per share and top line beat analysts' estimates. Further, the company raised its fiscal 2017 forecast for adjusted earnings.

In pre-market activity on the NYSE, Wal-Mart shares were gaining 3.80 percent to trade at $75.70.

For the second quarter, consolidated net income attributable to Walmart increased 8.6 percent to $3.77 billion from last year's $3.48 billion. Earnings per share grew 12 percent to $1.21 from $1.08 a year ago.

The latest results included gain from the sale of Yihaodian in China of $0.14 per share. Excluding this, adjusted earnings per share were $1.07.

On average, 24 analysts polled by Thomson Reuters expected earnings of $1.02 per share. Analysts' estimates typically exclude special items.

Consolidated operating income increased 1.6 percent from last year to $6.17 billion, including a gain of $535 million from the sale of Yihaodian. Excluding this gain, consolidated operating income declined 7.2 percent.

Total revenues edged up 0.5 percent to $120.854 billion from last year's $120.23 billion. On a constant currency basis, total revenue increased 2.8 percent. Analysts expected revenues of $120.16 billion.

Net sales grew 0.1 percent from last year to $119.41 billion, while membership and other income climbed 61.2 percent to $1.45 billion.

Walmart U.S. net sales grew 3.1 percent to $76.24 billion with positive comp sales for the eighth consecutive quarter, up 1.6 percent, driven by 1.2 percent increase in traffic. Neighborhood Market comp sales increased approximately 6.5 percent.

Net sales at Walmart International were $28.6 billion, down 6.6 percent. Excluding currency impacts, net sales grew 2.2 percent.Sam's Club net sales dropped 1.3 percent to $14.54 billion.

Looking ahead, for the third quarter, the company expects earnings per share of $0.90 to $1. Analysts expect earnings of $0.93 per share.

Comp sales for the 13-week period ending October 28 is expected to be up 1 percent to 1.5 percent for Walmart U.S., and for Sam's Club, excluding fuel, is slightly positive.

For fiscal 2017, the company now expects adjusted earnings per share of $4.15 to $4.35, higher than previous estimate of $4.00 to $4.30. Analysts expect earnings of $4.27 per share for the year.

The company estimates reported earnings per share of $4.29 to $4.49, including the non-cash gain from the sale of Yihaodian.