Wal-Mart Shares Fall as Results Disappoint, Company Cuts Forecast

Wal-Mart Stores posted quarterly sales and profit that fell short of expectations, and lowered its earnings forecast, saying that customers remain under economic pressure.

Shares of the Dow component fell more than 5 percent on the New York Stock Exchange Tuesday.

The world's largest retailer reported earnings of $3.1 billion, or 76 cents a share, for the second quarter ended July 31, up from earnings of $2.08 billion, or 50 cents a share, in the year-ago period. But excluding one-time items, the company earned 72 cents a share, flat with earnings from continuing operations in the same quarter a year ago.

Revenue rose 7.7% from the year-ago period to $91.99 billion.

Analysts surveyed by Thomson Financial predicted profit of 76 cents a share on revenues of $92.8 billion.

The company earlier said it expected to earn between 75 cents and 79 cents a share for the period.

Wal-Mart reduced its full-year earnings estimate from continuing operations to $3.05 to $3.13 a share from $3.15 to $3.23 a share. Analysts had predicted a full-year profit of $3.16 a share. For its fiscal third quarter, Wal-Mart sees earnings of 62 to 65 cents, below the consensus estimate of 68 cents a share.

"I certainly think that (the results have) come as a little bit as surprise, not necessarily the second quarter number, but when you look at the second-half and guiding down for the year, the market's saying that's a disappointment," John Lawrence, senior retail analyst at Morgan Keegan, told "Squawk Box."

The home and domestic products business needs to turn around a little bit, but overall Wal-Mart is just being cautions "with the economy where it is," Lawrence said.

Modest Same-Store Sales Growth Seen

Same-store sales for the second quarter rose 1.9% and the company said it expects third-quarter same-store sales to be higher by between 1% and 3%.

Chief Executive Lee Scott blamed the disappointing performance on economic pressure around the world.

"It is no secret that many customers are running out of money toward the end of the month," Scott said on a recorded conference call, citing consumer pressures ranging from high gas prices to the U.S. housing slump.

"Many customers around the world continue to be under economic pressure and they expect Wal-Mart to be their advocate," Scott said.

Generally, grocery sales have been stronger than general merchandise at Wal-Mart. Apparel and home products sales have been weak as the housing continues to show weakness.

© 2009 CNBC.com