Walmart (WMT, Financial) reported its second quarter 2016 earnings on Thursday, Aug. 18. The company beat revenue and earnings estimates for the quarter. Revenue beat estimates by $740 million and earnings per share beat estimates by $0.05.
Revenue for the quarter was $120.85 billion, an increase of 0.5% from the comparable quarter. Sales growth was led by Walmart U.S., accounting for 63% of revenue and increasing 3.1% from the comparable quarter. Membership and other income was also up significantly for Walmart, increasing 61.2% from the comparable quarter to $1.45 billion.
In the second quarter, Walmart had consolidated operating income of $6.2 billion, an increase of 1.6% from the comparable quarter. Consolidated net income was $3.8 billion, an increase of 8.6%. Unadjusted earnings per share were $1.21, an increase of 12%. During the second quarter of 2016, Walmart reported adjusted earnings per share of $1.07. Earnings per share were not adjusted in the second quarter of 2016 with earnings per share reported at $1.08. The adjustment in the second quarter was for a gain from the sale of Yihaodian in China.
The sale of the Yihaodian business will also affect the firm’s full year guidance. For the year the firm increased its earnings per share guidance to a range from $4.29 to $4.49, also increasing its adjusted earnings per share guidance to a range from $4.15 to $4.35.
In recent weeks, Walmart has also completed two e-commerce deals with significant long-term impact for the company. On Aug. 8, the company reported its acquisition of Jet.com. In June, the company also reported the sale of its Yihaodian business in China to JD.com (JD, Financial), for which it received 144.952 million shares. Walmart now holds a significant portion of the Chinese e-commerce company’s shares and will also partner with the company for e-commerce sales on its website.
Walmart’s shares have been gaining in 2016. Following the second quarter earnings announcement, the stock gained 1.87% and year to date the stock is up 18.78% at $72.81.
Warren Buffett (Trades, Portfolio) and Berkshire Hathaway (BRK.B, Financial)(BRK.A, Financial) continue to be a leading a shareholder of Walmart’s stock, however, Warren Buffett (Trades, Portfolio) decreased his share position in Walmart in the second quarter. Warren Buffett (Trades, Portfolio) now holds 40.2 million shares, with ownership of 1.3%.
In a CNBC report following the company’s earnings, a market specialist from Standard and Poor’s gave additional insight on the company’s second quarter and near-term outlook.
Disclosure: I do not own any shares of Walmart.
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