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Wal-Mart and future hopes

Written by A Forex View From Afar on Wednesday, February 20, 2008

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Wal-Mart just posed better then expected results both for the Q4 and all of 2007, beating analyst expectations.

Wall Street Journal tells us:

"For the quarter ended Jan. 31, the discount retailer reported net income of $4.1 billion, or $1.02 a share, up from $3.94 billion, or 95 cents a share, a year earlier

Total revenue climbed 9.5% to $107.43 billion, the first time a retailer has topped $100 billion in a quarter. The mean estimates of analysts polled by Thomson Financial were for earnings of $1.02 a share on $106.92 billion in revenue."

This shows consumers wasn't so reluctant to spend, they just need it a little boost, materialized in "lowering prices between 10% and 30%" and the best of all "no interest for 18 months on purchases of $250 or more with a Wal-Mart credit card"

It's very interesting that Wal-Mart, a barometer for US economy, posted good results with the high energy prices. High energy prices are transmitted in food and apparels, by higher transport prices and higher production prices. It seems consumers aren't too affected by these high prices. Should we draw the conclusion there is more room to grow for oil?

Wal-Mart is proof that things for consumers were not as bad as they looked, as a consequence, equities markets around the world went into the green.
This may look like a fake hope, because Wal-Mart, in the same statement, said it expects it's Q1 2008 revenues to fall to somewhere around of 70 cents to 74 cents a share.
It's a big drop from the current $1.02 per share.
Maybe things are starting to look good.

Wal-Mart's Net Rises 4% On Strong International

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