Walmart jumps to record high
- Walmart shares rose to a record high on Tuesday after the retail giant reported better-than-expected earnings and confirmed a $2.3 billion deal to buy smart-TV maker Vizio Holding Corp.
- The company also raised its annual dividend by 9.2%, the largest increase in over 10 years.
- Walmart’s U.S. chief revenue officer, Seth Dallaire, said the Vizio deal will “provide great viewing experiences at attractive price points” and “enable a profitable advertising business that is rapidly scaling.”
- Under the terms of the deal, Walmart will pay $11.50 for each Vizio share outstanding, a 20.7% premium above Friday’s closing price.
- Walmart’s stock climbed 2.2% in premarket trading, while Vizio shares shot up 15.3%.
Mixed news on profits
- On the downside for Walmart, the company provided a current-quarter profit outlook below expectations.
- For the quarter to Jan. 31, Walmart reported net income that fell to $5.49 billion, or $2.03 a share, from $6.28 billion, or $2.32 a share, in the same period a year ago.
- Excluding nonrecurring items, adjusted earnings per share of $1.80 beat the analyst estimates of $1.64.
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Strong sales growth
- Total revenue grew 5.7% to $173.39 billion, above the analyst estimates of $170.85 billion.
- U.S. comps, or stores open at least a year, rose 4.0% to beat the analyst estimates of 3.3% growth, while Sam’s Club comps rose 3.1% to top expectations of a 2.7% increase.
Dividend boost
- Walmart raised its annual dividend rate to $2.49 a share from $2.28.
- The company said the 9.2% increase is the largest dividend boost in over 10 years.
- After the stock’s three-for-one split takes effect on Feb. 26, the annual dividend rate will be 83 cents a share and the quarterly dividend will be 20.75 cents a share.
