Walmart profits take hit, but earnings rise as online grows

A shopper loads her car after shopping at a Walmart in Pittsburgh. The company reported its earnings on Thursday, May 17, 2018. (AP Photo)
Updated 17 May 2018
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Walmart profits take hit, but earnings rise as online grows

NEW YORK: US retail giant Walmart saw profits take a hit, but earnings beat analysts’ expectations and total sales rose amid the growth of online sales, according to results released Thursday.
Net income was down $905 million from the same period last year at $2.134 billion.
But the key earnings per share measure was $1.14, two cents higher than expected. And net sales, at $121.6 billion, were up 4.4 percent over the same period last year — more than $1 billion higher than expectations.
The decrease in net income is primarily due to a change in accounting policy related to Wal-Mart’s 2016 equity investment in Chinese online distributor JD.com, of which Wal-Mart holds a little more than 10 percent.
In its guidance, the company cautioned that the recent purchase of Indian online marketplace Flipkart announced earlier this month was expected to negatively impact earnings per share in the current fiscal year by $0.25 to $0.30 if the transaction closes at the end of the second quarter.
Wal-Mart, which is trying to compete with online giant Amazon, saw US comparable store sales rise 2.1 percent and customer traffic increase 0.8 percent, although the unseasonably cold weather hurt sales in the US.
US online sales surged 33 percent, while international sales jumped 4.5 percent.
“We are changing from within to be faster and more digital, while shaping our portfolio of businesses for the future,” Walmart chief Doug McMillon said in a statement.
Following the release, the company’s stock was up more than two percent in pre-market trading to $87.85.


US tariffs trigger WTO spat escalation

Updated 39 sec ago
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US tariffs trigger WTO spat escalation

GENEVA: China, Russia and the European Union are among a string of countries asking the World Trade Organization to probe new US steel and aluminum tariffs, the world trade body said Friday.
Washington is meanwhile calling the WTO to investigate a number of retaliatory duties imposed by a range of countries, the agenda for the next meeting of the organization’s Dispute Settlement Body (DSB) showed.
The agenda for the DSB meeting set to be held on October 29 shows that the EU, China, Russia, Canada, Mexico, Norway and Turkey plan to ask for the creation of a panel of experts to review US President Donald Trump’s decision to hit them with tariffs of 25 percent on steel and 10 percent on aluminum.
Marking a departure from a decades-long US-led drive for free trade, Trump has justified the steep tariffs with claims that massive flows of imports to the United States threaten national security.
The tariff spat has escalated into an all-out trade war between the US and China and growing trade tensions between Washington and many of its traditional allies.
The US is meanwhile planning to request that the DSB create another set of expert panels to review the legality of retaliatory tariffs imposed by China, Canada, the EU and Mexico.
The requests, which follow rounds of failed consultations, mark and escalation in an ongoing showdown at the WTO around Trump’s controversial trade policies.
Under WTO regulations, parties in a dispute can block a first request for the creation of an arbitration panel, but if the parties make a second request, it is all but guaranteed to go through.
“Once the panel is established and composed, the EU is ready to demonstrate that the United States’ import duties are WTO-inconsistent and to obtain a ruling that condemns the US and brings relief to the EU industry,” an EU Commission spokesperson said.
The creation of a DSB panel usually triggers a long and often costly legal battle that sometimes takes years to resolve.