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Wal-Mart Shares Rise Despite Lowered Guidance

The story has been edited with a clarification regarding Wal-Mart's earnings guidance. Stock prices have also been updated.

NEW YORK ( TheStreet) - Wal-Mart (WMT - Get Report) shares went back to positive territory after dipping earlier in the day, following the retailing giant's disappointing top line sales for the third quarter and lowered earnings guidance.

The Bentonville, Ark.-based retailing giant reported net income of $3.7 billion, or $1.14 a share, beating consensus estimates by a mere penny.

Total revenue rose an anemic 1.7% to $115.7 billion. Analysts, according to Thomson Reuters, were expecting the company to post revenue of $116.8 billion. Net sales rose 1.6% to $114.9 billion over last year. On a constant currency basis, net sales would have increased 2.7% to $116.2 billion, the retailer said.

Membership and other income rose 12.3% compared to the 2012 third quarter.

Wal-Mart's U.S. comp sales declined 0.3% for the 13-week period ending Oct. 25, excluding fuel. However the company said comp sales for its growing Neighborhood Market stores rose 3.4% in the quarter. The company also noted that Walmart U.S. gained market share in categories including food, consumables and health and wellness.

Traffic during the period decreased 0.4%, while average purchase tickets rose 0.1% in the U.S. Wal-Mart's e-commerce sales positively impacted comp sales by approximately 0.2% in the quarter.

Shares were rising 0.25% to $79.10 at midday.

"Walmart delivered solid earnings growth that was within our guidance range. We had strong operating income across our segments, with Walmart U.S. growing almost 6%, Sam's Club increasing more than 9%, and International up 8% on a constant currency basis," Wal-Mart's CEO and President Mike Duke said in a statement.

"Our most important priority is growing top line sales, including comp sales," Duke added. "The retail environment, both in stores and online, remains competitive. Walmart has aggressive plans to help our customers enjoy the holiday season, and there is no doubt that we plan to win for our customers and shareholders throughout the holidays."

The company expects Wal-Mart U.S. comp store sales to be relatively flat in the fourth quarter from 2012. Last year, Wal-Mart's comp sales rose 0.3%, it said.

Wal-Mart expects fourth quarter EPS between $1.50 and $1.60, which includes 10 cents per share related to store closures in Brazil and China and ending its retail franchise agreement in India. Excluding the 10 cents in related charges, the company expects fourth-quarter earnings of $1.60 to $1.70 a share.

The company also lowered its full year EPS guidance to a range between $5.01 to $5.11, which includes the 10 cents in related charges in the fourth quarter. Excluding the charges, Wal-Mart expects full-year earnings between $5.11 and $5.21 a share.

"The team has developed our best holiday plan ever. We are committed to being the number one retail destination," Wal-Mart U.S. CEO Bill Simon said. "We're making sure our shelves are well-stocked with the most popular toys, and we're guaranteeing low prices all season in the store through the Christmas Ad Match Program."

-- Written by Laurie Kulikowski in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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