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Wal-Mart Looks Even Better Next Quarter: Strategist

Wal-Mart Stores posted a higher-than-expected quarterly profit on Thursday. John Lawrence, managing director of equity research at Morgan Keegan, shared his earnings analysis on the firm.

Wal-Mart Earnings Reaction

“There’s always a little conservatism in those [earnings] numbers,” Lawrence told CNBC. “With these prices that we’re seeing, I think they’ll have a good fourth quarter.”

Wal-Mart also posted a 9 percent rise in quarterly underlying profit at its international businesses, outperforming its U.S. operations with strong growth in Britain, Mexico and Brazil. The retail giant has approximately 8,000 stores in 15 different countries with almost a quarter of their business from outside of the U.S.

“Thirteen million square feet [of new stores] were added in the quarter—and half of that [was] in the U.S,” said Lawrence.

“That’s pretty impressive in this environment…Only 32 percent of the [new] Wal-Mart stores in the U.S. has been touched with the remodeling program and that 32 percent is outperforming the other stores. We’ll have half of them done this time next year.”

Lawrence has a “buy” rating on Wal-Mart.

  • Lawrence Discusses Wal-Mart's Game Plan on CNBC (Nov. 2 2009)

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Lawrence does not own shares of Wal-Mart.