RRD.WI Donnelley (R.R.) & Sons Co.

CHICAGO, Feb. 23, 2011 /PRNewswire/ -- Zacks.com Analyst Blog features: Wal-Mart Stores Inc. (NYSE: WMT), Office Depot Inc. (NYSE: ODP), Macy's Inc. (NYSE: M), R.R. Donnelley & Sons Co. (NYSE: RRD) and Hormel Foods Corporation (NYSE: HRL).

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Here are highlights from Tuesday's Analyst Blog:

Wal-Mart Beats Estimates

Wal-Mart Stores Inc. (NYSE: WMT) reported better-than-expected fourth-quarter 2011 results. The retailing giant reported quarterly earnings of $1.41 a share reflecting a 11.9% increase over the prior-year earnings of $1.26 a share.

However, excluding the benefit of one-time items, earnings were $1.34 a share, which was ahead of the Zacks Consensus Estimate of $1.31, by 2.3%.

For the full year 2011, reported earnings came in at $4.18 a share, while adjusted earnings were $4.07. Both reported and adjusted earnings were ahead of the Zacks Consensus Estimate of $4.04 a share.

For the first quarter of fiscal 2012, Wal-Mart expects earnings to be in the range of 91 cents to 96. For fiscal 2012 earnings are expected to be in the range of $4.35 to $4.50 a share.

Revenue Details

Wal-Mart's net sales for the fourth quarter recorded growth of 2.5% to $115.6 billion from $112.8 billion in the year-ago quarter. The expansion was primarily driven by a robust 8.9% expansion in the International segment, which benefited from favorable currency translations, coupled with a 4.4% growth in the Sam's Club segment. However, sales at the Wal-Mart's U.S. segment were down year-over-year, declining marginally by 0.5%.

Wal-Mart, widely regarded as a bellwether for the U.S. economy, stated that U.S. same-store sales decreased 1.1% year-over-year, while that for Sam's Club grew by 2.7%.

Office Depot Beats Estimates

Office Depot Inc. (NYSE: ODP) recently posted better-than-expected fourth-quarter 2010 results. The quarterly earnings of 9 cents a share portrayed a substantial improvement from a loss of 6 cents in the prior-year quarter, and also fared better than the Zacks Consensus Estimate of a loss of 3 cents.

The Zacks Consensus Estimate had remained stable prior to the earnings release. On a reported basis, including one-time items, Office Depot delivered a loss of 21 cents a share, as against a loss of 28 cents posted in the year-ago quarter.

Despite a low-single digit decline in the top-line, the office supplies retailer was able to earn a profit on the heels of cost containment. Cost of goods sold and occupancy fell 4.2%, store and warehouse operating and selling expenses tumbled 5.5%, whereas general and administrative expenses slipped 9% during the quarter.

Office Depot's total revenue of $2,961.9 million fell short of the Zacks Consensus Estimate of $2,975 million, and also dropped 3.4% from the prior-year quarter due to soft demand for office supplies in a sluggish economy. The improvement in the bottom-line overshadowed the fall in the top-line.

Macy's Tops Consensus

Macy's Inc. (NYSE: M), one of the leading department store retailers in the U.S., recently posted fourth-quarter 2010 results that topped the Zacks expectations.

The quarterly earnings of $1.59 per share outperformed the Zacks Consensus Estimate of $1.51, and rose 17.8% from $1.35 delivered in the prior-year quarter. The quarterly earnings also surpassed management's guidance range of $1.44 to $1.49 per share.

The Zacks Consensus Estimate rose by a penny prior to the earnings release, with 3 out of 16 analysts covering the stock raising their estimates and 1 analyst lowering the projection in the last 30 days.

On a reported basis, including one-time items, quarterly earnings came in at $1.55 per share compared with $1.05 earned in the year-ago quarter.

Macy's now expects fiscal 2011 earnings between $2.25 and $2.30, which remains ahead of the current Zacks Consensus Estimate of $2.24. Following this a positive sentiment may be palpable among the analysts, and we could witness a rise in the Zacks Consensus Estimates in the coming days.

The company has been taking prudent steps to increase sales, profitability and cash flows, which include integration of operations, consolidation of divisions and customer-centric localization initiatives. To help drive traffic, Macy's continues to focus on price optimization, inventory management and merchandise planning.

Donnelley 4th Quarter Beats

A leading provider of integrated communications and printing solutions, R.R. Donnelley & Sons Co. (NYSE: RRD) reported fourth quarter 2010 earnings, on a non-GAAP basis, of 51 cents per share, beating the Zacks Consensus of 46 cents per share. Earnings increased 10.9% year over year from 46 cents reported in the prior-year quarter.

Revenue

Revenues increased 4.8% year over year to $2.71 billion and was above the Zacks Consensus Estimate of $2.66 billion. Fourth quarter revenue growth was impacted by an unfavorable foreign exchange and lower paper sales, which was fully offset by the acquisition of Bowne.

Net revenues comprise U.S. Print and Related Services revenues (74.8% of total sales), which increased 5.3% year over year to $2.02 billion due to the acquisition of Bowne, a rise in volume in logistics, financial print and commercial print, partially offset by price declines across most products and services, as well as lower paper sales.

International sales (25.2% of total sales) increased 3.5% to $682.4 million, primarily attributed to Bowne acquisition, partially offset by unfavorable foreign exchange rates. International sales were driven by increasing volumes in Asia and Latin America, partially offset by persisting pricing weakness.

Hormel Tops Zacks Estimate

Hormel Foods Corporation (NYSE: HRL) posted strong results for the first quarter of fiscal 2011 with an EPS of 55 cents compared with 41 cents in the corresponding period of fiscal 2010 based on year-over-year increases of 11.2% in revenue in the first quarter.

During the quarter, Hormel reported EPS of 55 cents, up 34.1% from 41 cents in the year-ago quarter and also up from the Zacks Consensus Estimate of 43 cents. Net income reached $148.8 million from $111.2 million in the first quarter of 2010. The increase was driven by revenue growth coupled with cost containment.

Net revenues were $1,921.6 million, up 11.2% from $1,727.4 million in the corresponding period of the previous year and $1,850 million according to the Zacks Consensus Estimate. This increase is attributable to increased revenues in Jennie-O Turkey Store and Refrigerated Foods segments.

Revenues from Jennie-O Turkey Store spiked 13.9% and Refrigerated Foods shot up by 13.3% due to the higher demand for food products based on the gradual improvement in economic conditions. Revenues from Grocery Products grew 5.8% and Specialty Foods grew 2.4% year over year.

The Refrigerated Foods segment finished the quarter with a 37.0% increase in operating profit and Jennie-O Turkey Store witnessed a strong improvement of 121.9% in profit based on the 12.0% and 10.4% year over year, respectively based on higher raw-material costs.

Selling, general and administrative (SG&A) expenses based on revenues declined by 80 basis points to reach $145.2 million.

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