Walmart's Dividend Duplicity


Jim Jubak Image Jim Jubak Founder and Editor,

It's an old trick: Lower your earnings estimates with one hand, while paying shareholders with the other, and hope no one cries foul. So far, it seems to have worked, writes MoneyShow's Jim Jubak, also of Jubak's Picks.

I’m much more interested right now in Walmart as an economic indicator than I am in Walmart as a stock to invest in. Let’s take the indicator apart, shall we? (Walmart (WMT) shares were up 2.6% as of 2 p.m. New York time yesterday.)

Before the market open in New York on Thursday, the company reported fourth-quarter earnings for the fiscal 2013 year that ended in January 2013 of $1.67 a share, 10 cents a share above Wall Street projections and an 11.3% increase from the fourth quarter of fiscal 2012. Revenue climbed a relatively meager 3.9% year-over-year, to $127.92 billion, versus the $127.76 billion Wall Street estimate.

That good news was balanced by very modest guidance for the first quarter. Comparable-store sales, which grew by 1% in the fourth quarter, will be flat in the first quarter. That’s not unexpected, after Bloomberg published Walmart e-mails last week that called February sales the worst in the last seven years.

For the first quarter, the company told analysts to expect earnings of $1.11 to $1.16 a share, versus the $1.18 Wall Street estimate.