Wal-Mart Profit up 13%

Elena
21 Feb, 2006
New York City

Asian-Pacific benchmarks ended mixed. The Nikkei surged 3% on signs of strong economic improvememt, followed by Shanghai Composite, up 1.7%. European averages advanced at mid-day, led by the German DAX 30, up 0.8%. In earnings news, top retailer Wal-Mart posted 13.4% profit jump in Q4 on $60.22 billion, or 8.6% revenue growth, beating estimates. Home Depot reported Q4 net income rise to 60 cents a share on 16% revenue increase and 5.5% same-store sales rise, exceeding estimates of 56 cents.

U.S. MARKET AVERAGES

U.S. stock futures predicted a positive opening on strong quarterly results from major retailers, including Home Depot Inc. and Wal-Mart Stores Inc. which posted earnings that beat expectations.

Departmental retailer Wal-Mart Stores Inc. ((WMTO)) announced a 13.4% increase in net income for Q4 due to strong demand for laptop computers and gift cards, beating analysts'' expectations. Wal-Mart Stores revealed net income of $11.2 billion or $2.68 per share for fiscal 2006, higher than $10.3 billion or $2.41 per share in fiscal 2005 and above the average analyst consensus of $2.62. The company provided 2007 earnings guidance that fell short of estimate.

Home Depot, ((HD)), home-improvement retailer, reported that Q4 net earnings rose on strong sales in installations. The company posted 16% revenue growth and 5.5% same-store sales increase.

In economic news, minutes from the Federal Reserve''s last interest rate-setting meeting are set for release at 2 p.m., expected to give clues about the direction of monetary policy.

S&P 500 futures were up 4.1 points, above fair value. Dow Jones industrial average futures rose 34 points, and Nasdaq 100 futures were up 6.5 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks finished Tuesday session mixed. The Nikkei soared 3% to 15,894.04 on evidence of economic improvement. Among the other regional gainers, Shanghai Composite climbed 1.7%, Singapore Straits Times advanced 0.5%., and Australia’s All Ordinaries rose 0.9%. On the losing side stood South Korea’s Kospi, down 1% and Taiwan’s Weighted index, down 0.8%.

European stocks advanced at mid-day to reach multi-year highs, boosted by strong utilities which rallied on a bidding war starts for the Spanish Endesa. The German DAX 30 rose 0.8%, the French CAC 40 climbed 0.8%, and London’s FTSE 100 gained 0.3%.

OIL, METALS, CURRENCIES

Crude oil prices jumped over $1 on supply concerns, following a violent militant act against oil pipelines in the Niger Delta. Light sweet crude March delivery climbed $1.27 to $61.15 a barrel. Heating oil added 2 cents to $1.6829. Gasoline gained to $1.5249, while natural gas climbed 16 cents to $7.345 per 1,000 cubic feet. London Brent for April delivery fell 16 cents to $61.38 a barrel.

European gold lost ground. In London gold traded at the fixed price of $553.40 bid per troy ounce, down from $555.70. In Zurich the precious metal traded at $553, down from $555.60. In Hong Kong gold gained 20 cents to close at $553.10. Silver opened unchanged at $9.51.

The U.S. dollar was mixed against other major currencies. The euro traded at $1.1915 down from $1.1945. The dollar bought 118.79, up from 118.19. The British pound stood at $1.7439, down from $1.7444.

EARNINGS NEWS

Wal-Mart Stores, ((WMT)), retailer, reported Q4 earnings of 86 cents a share, a 13.4% jump from 75 cents a share in the year-earlier period on sales and 3.1% same-store sales growth, beating analyst view of 83 cents a share. The figures include a 2-cent a share tax benefit.

Home Depot, ((HD)), home-improvement retailer, reported that Q4 net earnings reached 60 cents a share, up from 47 cents a share in the year-earlier period on 16% higher revenue while same-store sales grew 5.5%, beating analyst estimate of 56 cents a share.

Triad Hospitals Inc, ((TRI)), owner and manager of hospitals and ambulatory-surgery centers, reported that Q4 earnings advanced 11% to $54.6 million, or 63 cents a share, from $49.2 million, or 64 cents in the same period the prior year on 17% revenue growth, missing analyst estimate of 66 cents.

State Auto Financial ((STFC)), insurer, reported Q4 net income of 71 cents a share, down from 93 cents in the same period the prior year, missing analyst forecasts of 87 cents a share. The company’s net income from operations reached 73 cents a share, down from 92 cents. Revenue advanced to $280.9 million from $273 million, as net premiums written advanced to $244.8 million from $239.9 million.

Federal Signal Corp, ((FSS)), manufacturer of safety and signalling equipment, reversed to a Q4 net loss of 54 cents a share, down from a year-ago profit of 13 cents a share despite 2.1% revenue growth. Federal Signal added that the loss included a $34 million write-down from the decision to exit the refuse truck body business. Income from continuing operations was 28 cents a share.

US Airways Group Inc ((LCC)), carrier, reported a Q4 net loss of $3.26 a share, up from $4.66 a share in the year-ago period. Last period’s loss reflects that the prior period inclusion of only America West's data. The company included a $69 million unrealized loss related to the airline's fuel hedges as well as $36 million of special charges and $18 million in charges partially related to the remarketing and warrant repurchase associated with America West's prior Airline Transportation Stabilization Board loan. If not for these items, the company would have reported a quarterly loss of $1.72 a share, considerably up from $3.89 a share a year ago. Quarterly revenue reached $2.58 billion as opposed to $697 million. Analysts had been expecting a loss of $1.93 a share.

Memory Pharmaceuticals Corp, ((MEMY)),manufacturer of drugs to treat central nervous system conditions, reported that its Q4 net loss was narrower, coming to 10 cents a share, from $6.84 million in the prior quarter on 52.5% revenue growth. The company stated that its net loss included a $2.2 million noncash gain referring to warrants issued in a September private placement.