Bentonville, AR, February 21, 2006-- Wal-Mart posted higher quarterly profit as an aggressive holiday advertising campaign drove demand for laptop computers and gift cards in the biggest shopping period of the year.
The company said it expected earnings for the new fiscal year to range from $2.88 to $2.95 per share. That was below analysts' expectations for $2.99.
Net income rose to $3.6 billion, or $0.86 per share, in the fourth quarter ended January 31, from $3.2 billion, or $0.75 per share, a year earlier.
Excluding a tax benefit, earnings were $0.84 per share. Analysts on average expected the discount retailer to earn $0.83. Wal-Mart said in January that profit would probably be near the low end of its forecast for $0.82 to $0.86.
Net sales rose 8.6 percent to $89.3 billion.
Wal-Mart has been grappling with rising costs, particularly for energy and health care. At the same time, sales growth has slowed somewhat as its low-income customers cope with steeper gasoline and home heating bills.
The company launched its holiday advertising campaign on November 1, two weeks earlier than normal, and offered early-bird specials that included a laptop computer for less than $400.
The promotions drove strong November sales, but December results were disappointing, partly because of demand for gift cards, which count toward revenue only when they are redeemed. As a result, January sales were stronger than expected.
The U.S. Wal-Mart Stores division, the retailer's largest unit, posted quarterly sales growth of 8.6 percent. Operating profit rose 11.1 percent.
At Sam's Club, sales were up 6.8 percent and operating profit rose 6.2 percent.
In the international division, where Wal-Mart has been struggling with disappointing results in its British Asda stores, sales were up 9.6 percent, while operating profit increased 14.1 percent.
