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Wal-Mart Stores, the world's largest retailer, managed to cross the $2 billion earnings mark for the first time despite what executives described as a "challenging environment." The fourth-quarter results beat Wall Street expectations. For the three months ended Jan. 31, Wal-Mart earned $2.004 billion, or 45 cents per share, up 4.5 percent from $1.92 billion, or 43 cents per share, in the year-ago period, the Bentonville-based company said Tuesday. Analysts surveyed by First Call/Thomson Financial were expecting 44 cents per share. Sales jumped 10 percent to $56.56 billion, up from $51.39 billion in the year-ago period. Wal-Mart's profits in the fourth quarter would have been flat if the discounter had not taken a large accounting charge to adjust for deflationary pressures that made its inventory less valuable, said Bob Buchanan, an analyst at A.G. Edwards & Sons. Sales at Wal-Mart stores open more than a year, or what is known as same-store sales, rose 3 percent, while sales at its Sam's Club warehouse division rose 3.3 percent.

The Home Depot reported a 20 percent drop in fourth-quarter profits Tuesday and cautioned that it continues to struggle with sluggish sales and weak prices for its products. The world's largest home improvement retailer said its fourth-quarter net income was $465 million, or 20 cents per share. That matched the lowered forecast of analysts surveyed by First Call/Thomson Financial. Atlanta-based Home Depot warned Jan. 19 that the slowing economy would hurt its results, prompting the lowered forecast. In the same period of 1999, Home Depot earned $578 million, or 25 cents per share, but the company noted that sales related to preparations for the Y2K computer bug affected those results. The company said its fourth-quarter sales were $10.46 billion, up from $9.17 billion a year earlier. Sales increased 19 percent last year, to $45.7 billion, from $38.4 billion in 1999. But sales at stores open at least a year -- a crucial measurement for retailers -- were flat during the quarter. Home Depot said weak lumber prices, which hit an eight-year low during the last three months of 2000, affected sales by 2 percent. For the year, Home Depot said it earned $2.58 billion, or $1.10 per share, up 11 percent from the $2.32 billion, or $1 per share, it reported in 1999. Before the weak fourth quarter, analysts had expected Home Depot to earn $1.14 per share in 2000. Nardelli said the prices of lumber and related building products had nicked profits severely throughout 2000 and the typically busy holiday shopping period was flat compared to the previous year. Home Depot opened 204 stores last year, including its first in Argentina and Quebec. The company plans to open 200 stores in 2001.

Agilent Technologies said its first-quarter earnings rose 18 percent and beat Wall Street's expectations, but the test and measurement equipment maker reduced its guidance for the second quarter because orders have slowed dramatically. Agilent, which was spun off in 1999 from Hewlett-Packard Co., said that in the three months ending Jan. 31, net earnings were $154 million, or 33 cents a share, up from $131 million, or 30 cents per share, in the year-ago quarter. Excluding one-time charges, Agilent's earnings rose 66 percent to $237 million, or 51 cents per share, compared with $143 million, or 31 cents per share, a year ago. Revenue was up 26 percent, to $2.84 billion from $2.24 billion in the year-ago period.

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