Wal-Mart Stores Inc. (WMT) reported better-than-expected fourth-quarter 2011 results. The retailing giant reported quarterly earnings of $1.41 a share reflecting a 11.9% increase over the prior-year earnings of $1.26 a share.

However, excluding the benefit of one-time items, earnings were $1.34 a share, which was ahead of the Zacks Consensus Estimate of $1.31, by 2.3%.

For the full year 2011, reported earnings came in at $4.18 a share, while adjusted earnings were $4.07. Both reported and adjusted earnings were ahead of the Zacks Consensus Estimate of $4.04 a share.

For the first quarter of fiscal 2012, Wal-Mart expects earnings to be in the range of 91 cents to 96. For fiscal 2012 earnings are expected to be in the range of $4.35 to $4.50 a share.

Revenue Details

Wal-Mart’s net sales for the fourth quarter recorded growth of 2.5% to $115.6 billion from $112.8 billion in the year-ago quarter. The expansion was primarily driven by a robust 8.9% expansion in the International segment, which benefited from favorable currency translations, coupled with a 4.4% growth in the Sam’s Club segment. However, sales at the Wal-Mart’s U.S. segment were down year-over-year, declining marginally by 0.5%.

Wal-Mart, widely regarded as a bellwether for the U.S. economy, stated that U.S. same-store sales decreased 1.1% year-over-year, while that for Sam’s Club grew by 2.7%.

Meanwhile, quarterly operating income grew by 7.3% year-over-year to $8.0 billion, while the operating margin increased by 31 basis points to 6.9%. The growth was primarily caused by favorable foreign currency translations.

Wal-Mart ended the year with 985 million square feet of retail space. In fiscal 2012, the company expects organic square footage to increase between 3% and 4%.

Balance Sheet and Cash Flow

Wal-Mart ended the year with free cash flow of $10.9 billion, a decline of 22.7% from $14.1 billion in the year-ago period, mainly due to higher inventory costs. However, the company benefitted from a Return on Investment (ROI) of 18.6% during the quarter compared to 19.2% in the prior year period. The company has a debt-to-capitalization ratio of 36.5%.

 
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