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Wal-Mart Sales Show Cracks

Wal-Mart Stores posts a better-than-expected profit, but its same-store sales slip.

(Updated with analyst commentary on Wal-Mart earnings, as well as Wal-Mart stock movements.)

NEW YORK (

TheStreet

) --

Wal-Mart Stores

(WMT) - Get Walmart Inc. Report

posted a slight uptick in third-quarter profit, despite the fact that its same-store sales slipped.

During the quarter, the behemoth discounter posted a profit of $3.24 billion, or 84 cents per share, a 3.2% increase over the same period last year. Analysts expected the company to earn 81 cents a share.

Revenue inched up 1% to $99.4 billion from $98.3 billion, while comparable sales fell 0.4%.

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"The sales environment continued to be difficult this quarter, but customer traffic is up throughout the company," CEO and President Michael T. Duke said in a statement.

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Still, Wal-Mart delivered its highest operating income growth in nearly a decade.

And its international business outperformed U.S., with particular strength in Britain, Mexico and Brazil.

Wal-Mart upped its full-year outlook to $3.57 to $3.60 a share, from a prior forecast of $3.50 to $3.60 a share. Analysts were expecting earnings of $3.58 a share.

For the fourth quarter, the retailer anticipates a profit of between $1.08 and $1.12 a share.

But with Wal-Mart undertaking extensive price cuts on toys, books and now its newest Blackberry promotion, investors may fear that Wal-Mart will be unable to meet this guidance, Wall Street Strategies analyst Brian Sozzi said in a note.

Regardless, Sozzi says he is surprised by how big of a deal the Street is making over this conservative guidance.

"We expected this cautious outlook," he says. "I like what I heard, inventories are lean and traffic is still there."

Shares regained slightly after falling in pre-market trading, up 1.3% to $53.64.

-- Reported by Jeanine Poggi in New York

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