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Wal-Mart -Q2 Profit Rises 5.7% on U.S. Sales

Wal-Mart Stores Inc., the world’s largest retailer, boosted its profit forecast for the year after second-quarter earnings rose and the Sam’s Club wholesale chain helped the company halt a decline in sales at its U.S. stores. Profit in the fiscal year ending in January will be $4.41 to $4.51 a share, up from a previous projection of $4.35 to $4.50, Bentonville, Arkansas-based Wal-Mart said today in a statement. The average estimate of 25 analysts in a Bloomberg survey was $4.47. Second-quarter net income climbed 5.7 percent.

Chief Executive Officer Mike Duke is restoring thousands of products to shelves to lure shoppers coping with widespread unemployment and higher fuel prices. Second-quarter sales at the company’s U.S. stores open at least a year were unchanged from a year earlier, excluding fuel, Wal-Mart said. Those sales had fallen in the eight previous quarters. Wal-Mart’s changes “should provide a good base to return same-store sales into positive territory,” Bob Summers, an analyst at Susquehanna Financial Group, wrote in a note yesterday. He has a “positive” rating on the stock.

Excluding fuel, sales at Sam’s Club locations open at least a year gained 5 percent, while those sales at U.S. Wal-Mart stores declined 0.9 percent.

Wal-Mart advanced 82 cents, or 1.6 percent, to $50.80 at 8:03 a.m. in trading before the open of the New York Stock Exchange. The shares had dropped 7.3 percent this year before today.

Second-Quarter Profit

Net income in the three months ended July 31 climbed to $3.8 billion, or $1.09 a share, from $3.6 billion, or 97 cents, a year earlier, Wal-Mart said. The average estimate of 21 analysts in a Bloomberg survey was $1.08 a share. Revenue rose 5.4 percent to $109.4 billion.

For the current quarter, the company forecast profit of 95 cents to $1 a share, excluding some items. The average estimate of 21 analysts was 97 cents.

Wal-Mart’s international net sales rose 16 percent to $30.1 billion, and Sam’s Club’s increased 9.5 percent to $13.6 billion. Net sales in the U.S. climbed 0.4 percent to $64.9 billion.

Net sales for the quarter included a benefit of $2.3 billion from currency exchange-rate fluctuations, Wal-Mart said.

Source: Lauren Coleman-Lochner (Bloomberg)