×

Wal-Mart earnings beat expectations; shares up

Wal-Mart Stores reported stronger-than-expected quarterly earnings on Tuesday as it booked its fifth straight gain in same-store U.S. sales, sending its shares up nearly 3 percent higher in premarket trading.

Net profit attributable to Wal-Mart fell to $3.304 billion, or $1.03 per share, in the third quarter ended on Oct 31 from $3.711 billion, or $1.15 per share, a year earlier. The retail giant reported adjusted profit of 99 cents per share for the third quarter.

Analysts on average had expected adjusted earnings of 98 cents per share, according to Thomson Reuters I/B/E/S.

Wal-Mart said consolidated revenue fell 1.3 percent to $117.4 billion, weighed down by its international operations, which have been hurt by a stronger dollar.

Wal-Mart's earnings have been under pressure from costs to boost entry-level wages, although the company says those investments have translated into better customer service and sales.

Sales of U.S. stores open at least a year rose by 1.5 percent. Wal-Mart said traffic to its roughly 4,600 stores increased by 1.7 percent.

Shares of Wal-Mart were up 2.6 percent at $59.36 in premarket trading. (Click here to track the stock.)

Wal-Mart shares have plunged more than 30 percent this year. The most recent hit to the retail giant's stock came last month, when it said full-year sales would be flat.

Wal-Mart attributed the sluggishness to a stronger U.S. dollar, saying revenue would rise 3 percent excluding currency exchange rates. The company noted that recent wage hikes will increase costs by $1.2 billion this year and estimated that earnings per share could decline by 6 to 12 percent next fiscal year.

Last month, CEO Doug McMillon stressed the pay increases were "the right decision to make" despite the market reaction.

The retailer noted that it would funnel about $1.1 billion next year into e-commerce and digital platforms.

CNBC contributed to this report.