On a day when stocks were down more than 3%, Wal-Mart (NYSE: WMT) moved to the upside yesterday by more than 4%. The reason for the big gain was the company's fourth-quarter operating performance.
The company reported that it had earned $1.03 per share, excluding items. This compares favorably to analyst expectations of 99 cents per share. In the year prior, WMT made $1.02 per share.
The company said it is seeing customer traffic increase as it draws sales away from competitors. The intense focus on price savings is paying dividends during this economic slowdown.
WMT said earnings were hurt by a strong U.S. dollar that weakened the impact of overseas sales. Looking forward, WMT expects the global slowdown to negatively impact performance and that a strong dollar would hurt earnings over the next few quarters.
No matter -- investors were impressed and sent shares higher on a day when stocks were broadly lower. Because future earnings are within the range of current expectations, investors need not worry about reductions in estimates that most companies are seeing today.
Interestingly, at a time when most companies are scaling back on stock buybacks, WMT stated that it would be restarting its own buyback program at some point during the year. The company had discontinued buybacks in October of last year when the credit markets were in complete disarray.
WMT appears to be a retail stock that investors can own and feel easy about.
Louis Navellier's PortfolioGrader Pro, which rates Wall Street stocks, rates WMT a B or Buy.
Jamie Dlugosch is a contributor to OptionsZone.com.
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Reader Comments (Page 1 of 1)
2-18-2009 @ 1:46PM
thedude said...
You are absolutely incorrect. No way should anyone feel "Pride" shopping at WalMart or owning thier stock
Anyone who shops at WalMart and anyone who owns WalMart stock is in my book guilty of treason for undermining the US manufacturing industy and as such should be tried and found guily as a traitor and executed promptly
2-19-2009 @ 7:07AM
Irish said...
Sure, you make money investing in Wal-mart, but is the money earned worth the degradation of the United States' economy? Is it worth it to watch the entire nation being herded into a store selling cheap crap from China? Is it worth it to watch Wal-mart degrade the pay scale? Is it worth it to watch Wal-mart enrich China and kill off millions of small businesses throughout the U.S.? Who cares, right? You made money! I wish people would see the damage Wal-mart has done to our country! When they do, it'll be too late. In fact, it's already too late!
2-20-2009 @ 2:37PM
roudy11z said...
The first two comments forgot about Target and all the other retailers that buy abroad.Lets get it fair and balanced. OK?RoudMan