Wal-Mart Profit Falls, First Drop in 10 Years

Wal-Mart Stores, Inc. has reported sales and earnings for the quarter ended July 31, 2006. Net sales for the second quarter were $84.524 billion, an increase of 11.3 percent over the second quarter of fiscal 2006. Income from continuing operations for the quarter was $2.984 billion, an increase of 4.6 percent from $2.853 billion in the second quarter of fiscal 2006. Earnings per share from continuing operations were $0.72, up from $0.68 per share in the same prior year quarter. During the quarter, the Company entered into agreements to sell its operations in South Korea and Germany. These operations are now accounted for as discontinued operations. In connection with the sale of its German operations, the Company has recorded a loss on the sale of $863 million, included in discontinued operations. Both the sale of the South Korean and German operations are subject to regulatory approval.

Net sales for the six months ended July 31, 2006, were $163.359 billion, an increase of 11.9 percent over the first six months of fiscal 2006. Income from continuing operations for the six months ended July 31, 2006, increased 5.2 percent to $5.645 billion, up from $5.365 billion in the same prior year period. Earnings per share from continuing operations for the six months ended July 31, 2006, were $1.35, up from $1.28 in the same prior year period. Earnings per share from continuing operations for the six months ended July 31, 2005, were favorably impacted by two items totaling $145 million after tax or $0.03 per share: an increase due to favorable tax resolutions of $77 million and positive legal developments of $68 million after-tax.



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