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Walmart Beat Estimates for Fiscal 4Q17, but Earnings Fell

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Earnings exceed estimates

Walmart’s (WMT) fiscal 4Q17 earnings, excluding one-time items, exceeded the consensus analyst earnings estimate. It marked the sixth consecutive quarter that the company has surpassed analyst expectations. Adjusted EPS (earnings per share) was $1.30, beating the consensus Wall Street estimate of $1.29.

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Earnings continued to fall

Even though Walmart’s fiscal 4Q17 earnings exceeded analyst expectations, earnings fell YoY (year-over-year). Adjusted EPS fell 12.8% YoY to $1.30. That was more than the 1.0% fall in fiscal 3Q17 and the 7.6% fall in fiscal 4Q16. Currency headwinds, higher wages, and increased expenses for investments in technology impacted its bottom line.

Adjusted EPS in fiscal 4Q17 excluded the impact of post-tax charges of $0.08. Those charges related to discontinued real estate projects and severance charges in the company’s US business.

Walmart’s peer Target (TGT) is expected to report its fiscal 4Q16 results on February 28, 2017. Analysts expect its adjusted EPS to fall 0.90% YoY. Kroger (KR) is scheduled to declare its fiscal 4Q16 results on March 2, 2017. It’s expected to report an 8.4% fall in adjusted EPS.

For fiscal 2017, Walmart’s adjusted EPS fell to $4.32 from $4.59 in fiscal 2016.

Earnings outlook

Walmart expects its fiscal 2018 EPS to be $4.20–$4.40. The guidance assumes that adverse currency fluctuations will have a $0.05 per share impact on fiscal 2018 EPS.

In the next part of this series, we’ll take a look at Walmart’s revenue.

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