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Updated from 9:42 a.m. EST

Shares of retailing behemoth


(WMT) - Get Walmart Inc. Report

were lower in late-afternoon trading Tuesday despite stronger-than-expected fourth-quarter earnings, as investors focussed on a less-stellar outlook for the company in the coming months.

Wal-Mart reported Tuesday that its earnings per share jumped 23% for the quarter to 43 cents per share from 35 cents per share in the year-ago period. Wall Street analysts had been looking for 42 cents per share, according to

FirstCall/Thomson Financial

. Total income for the quarter, which ended Jan. 31, was $1.92 billion compared to $1.56 billion for the year-ago quarter.

The earnings were highlighted by 92% increase in profits from overseas stores.

Wal-Mart stock had been lower throughout the session as investors focussed on the company's slower outlook for future earnings growth, but the stock rebounded late in the day.

In late trading Tuesday, shares of Wal-Mart were down 1 3/4, or 3%, at 57 1/8. The stock had traded as much as 5% lower earlier in the session. (It closed down 1 13/16, or 3.1%, at 57 1/16.)

Wal-Mart chief financial officer Thomas Schoewe indicated that earnings growth is likely to moderate over the next few quarters.

"We're excited about the level of earnings growth we've achieved, but are now facing difficult comparisons resulting from the year's tremendous performance, and increased pressure on operating expenses," said Schoewe in a conference call.

In particular, he said the company is expecting "single-digit" quarter-over-quarter growth for the company's fiscal first quarter, which ends May 31. He also said monthly comparisons to last year could fluctuate for the quarter, citing the late-April Easter holiday, which will take away holiday-related sales from March.

Some analysts said Wal-Mart's expectations for 2000 were less optimistic than they had come to expect from the company. "The outlook seemed somewhat lukewarm, and they are usually pretty bullish," said Alan Mak, retail analyst at

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Argus Research

, which rates Wal-Mart a hold and has not done any underwriting for the company.

Mak added, however, that Wal-Mart's outlook is likely to become an overall theme throughout the retail industry. "On one hand, consumer demand is very high, but retailers are cautious because interest rates are on the rise. The Fed is actively trying to slow consumer demand, which dampens the outlook for most retailers."

Still, nearly all industry watchers say that Wal-Mart is at the head of the retailing pack, and is well poised to weather a slowdown in U.S. retail demand, especially given its aggressive domestic pricing power and its fast-growing overseas presence.

Some analysts even thought Wal-Mart's outlook may have been too conservative. "We continue to believe that there is upside to current estimates for 2000," said Richard L. Church, retail analyst at

Salomon Smith Barney

, which has underwritten debt, but not stock for Wal-Mart, and rates the stock a buy.

Wal-Mart's fourth-quarter results were highlighted by a sharp increase in sales in the company's international stores, which had an operating profit of $450 million for the fourth quarter compared with $235 million for the same period last year.

The Bentonville, Ark.-based company also posted record sales of $51.39 billion for the quarter, up 26% from the prior year.

The company's 1,801 flagship domestic Wal-Mart stores and 721 Supercenters accounted for 62% of total sales, while its 463

Sam's Club

wholesale warehouse stores accounted for about 14%. Internationally based stores accounted for 19%, and the remaining 4% came from its



International profits rose 92% for the quarter to $450 million, and 49% for the entire year to $817 million. The company operates international stores in Argentina, Brazil, Canada, China, Germany, Korea, Mexico, Puerto Rico and the U.K.

Wal-Mart's total fiscal 2000 results came in slightly below Wall Street expectations. Net income for the year rose 26% to $5.575 billion, or $1.25 per share, compared to analyst expectations for $1.27 per share. For the previous fiscal year, the company earned $4.43 billion, or 99 cents per share.

The company also said it adopted changes in its accounting techniques for membership revenue at its Sam's Club stores, which resulted in a one-time reduction to its earnings of about 4 cents per share. The company said it will now report membership fees over the life of the membership, rather than for the quarter the membership began.