Wal-Mart said second-quarter profit increased by the smallest amount in four years and reduced its full-year earnings forecast, blaming...

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Wal-Mart said second-quarter profit increased by the smallest amount in four years and reduced its full-year earnings forecast, blaming record gasoline prices for crimping consumer spending. The shares had their biggest decline in more than eight months.

Net income at the world’s largest retailer increased 5.8 percent to $2.8 billion, or 67 cents a share, from $2.65 billion, or 62 cents, a year earlier. Total revenue in the quarter ended July 31 climbed 10 percent to $77.52 billion, Wal-Mart said yesterday.

Same-store sales in the U.S. rose 3.5 percent, less than a year ago, hurt by gasoline prices that reached almost $2.33 a gallon in July.

“Wal-Mart definitely sees impact from rising gasoline prices,” said Donald Gher, chief investment officer at Bellevue’s Coldstream Capital Management, which manages $650 million including shares of Wal-Mart. “It takes away from discretionary income for their consumer.”

Shares of Wal-Mart — one of the 30 Dow industrial stocks — fell $1.53, to $47.57 yesterday.

Home Depot

New-product sales spark more profit

Home Depot said second-quarter profit climbed 14 percent, beating analysts’ estimates, as new products including outdoor furniture and Ryobi power tools boosted sales. The company raised its earnings forecast for the year.

Net income at the world’s largest home-improvement retailer jumped to $1.77 billion, or 82 cents a share, from $1.55 billion, or 70 cents, a year earlier. It was the 10th straight quarterly gain for profit. Sales in the period ended July 31 rose 12 percent to $22.3 billion, the company said in a statement.

The company increased its forecast for full-year net income to a range of $2.58 to $2.62 a share from about $2.49 to $2.53. Its forecast for sales growth remains unchanged at 9 percent to 12 percent.

Home Depot’s shares have increased 20 percent in the past year, compared with a 32 percent gain for Lowe’s. Shares of Home Depot, one of the 30 Dow industrials, fell 94 cents yesterday to $40.67.

J.C. Penney


shoppers spur rise

J.C. Penney, the second-largest U.S. department-store company, said second-quarter profit rose to $131 million on strong sales of private-label women’s clothing and accessories.

Net income increased from $1 million a year ago. Per-share profit was 50 cents, compared with a loss of 2 cents a year ago, J.C. Penney said today. Sales rose 5.4 percent to $3.98 billion and the company raised its profit forecast for the third time.

Comparable sales at J.C. Penney’s department stores rose 4.2 percent and 7.1 percent at the Internet and catalog units.


Tax adjustments cause sharp decline

Hewlett-Packard’s fiscal third-quarter earnings beat Wall Street expectations as the personal-computer company’s sales improved and its printer business remained strong amid a major corporate restructuring.

But earnings fell sharply due to tax adjustments from the repatriation of $14.5 billion in foreign earnings.

For the three months ended July 31, HP earned $73 million, or 3 cents per share, compared with $586 million, or 19 cents per share, in the same period last year.

Excluding $988 million in adjustments related to the cash repatriation, HP earned $1.06 billion, or 36 cents per share, compared with profit of $728 million, or 24 cents per share, in the third quarter of fiscal 2004.

Analysts were expecting the company to post earnings of 31 cents per share on sales of $20.47 billion, according to a survey by Thomson Financial.

Compiled from Bloomberg News and The Associated Press.