Wal-Mart, Home Depot surprise with earnings

Big U.S. retailers Wal-Mart Stores and Home Depot reported better-than-expected earnings Tuesday.

Wal-Mart reported a 3.6 per cent increase in second-quarter earnings and Home Depot's rose seven per cent.

Wal-mart also increased its estimate of profit for the full year as a result of cost cutting and expected strong growth in demand in China, Brazil and Mexico.

The discount retailer earned $3.59 billion US, or 97 cents per share, for the period ended July 31. That compared to $3.47 billion, or 89 cents per share, a year ago.

A key measure of sales, same store revenue, did not increase as much as analysts had expected, dragged down by its U.S. Wal-Mart division, as its main customers have felt the biggest impact of the economy's woes.

Overall revenue rose almost three per cent to $103.7 billion. But revenue at stores open at least a year fell 1.4 per cent, worse than the 0.26 per cent expected by Thomson Reuters, and their fifth straight quarterly drop.

Same-store sales allow an accurate comparison of results from year to year, and eliminate the gains made by simply opening more stores.

Home Depot's earnings beat by a penny

Home Depot's quarterly net income rose to $1.19 billion, or 72 cents per share, from $1.12 billion, or 66 cents per share last year.

Analysts polled by Thomson Reuters, on average, expected 71 cents per share.

Revenue rose two per cent to $19.41 billion from $19.07 billion last year. Analysts had predicted $19.59 billion.

The largest American home improvement retailer also trimmed its full-year revenue outlook to a 2.6 per cent increase, from a 3.5 per cent rise.

Home Depot operates 2,244 retail stores in the U.S., Canada, Mexico and China.