On May 16, Wal-Mart (NYSE:WMT) released Q1 2007 earnings for the period ended April 30, 2006.

  • The company recorded 12.3% sales growth, driven by same-store-sales growth of 3.8%, new stores, and international acquisitions.
  • Net margins declined and lagged improvements in gross and operating margins, largely on increased interest expense from higher long-term debt balances.
  • There was a strong increase in operating cash flow and free cash flow.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q1 2006

Q1 2005

Change

Sales

$80,430

$80,468

$71,680

12.3%*

Net Profit

--

$2,615

$2,461

6.3%

EPS

$0.61

$0.63

$0.58

8.4%

Diluted Shares

4,170,000

4,234,000

(1.5%)

*Sales growth does not include "Other income, net"

Get back to basics with a look at the income statement.

Margin Checkup*

Q1 2006

Q1 2005

Change**

Gross Margin

23.57%

23.04%

0.53

Operating Margin

5.59%

5.56%

0.03

Net Margin

3.28%

3.47%

(0.19)

*Sales do not include "Other income, net"
**Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q1 2006

Q1 2005

Change

Cash + ST Invest.

$5,858

$4,955

18.2%

Accounts Rec.

$2,507

$1,520

64.9%

Inventory

$32,206

$31,349

2.7%



Liabilities

Q1 2006

Q1 2005

Change

Accounts Payable

$25,383

$22,910

10.8%

Long-Term Debt

$25,036

$18,232

37.3%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q1 2006

Q1 2005

Change

Cash From Ops.

$3,740

$2,513

48.8%

Capital Expenditures

$3,220

$2,772

16.2%

Free Cash Flow

$520

($259)

N/A



Find out why Fools always follow the money.

Related Companies:

  • Target (NYSE:TGT)
  • Sears Holdings (NASDAQ:SHLD)
  • Costco (NASDAQ:COST)
  • BJ's Wholesale Club (NYSE:BJ)
  • Dollar General (NYSE:DG)

Wal-Mart is an Inside Value selection. Costco is a Stock Advisor recommendation. Check out our entire suite of newsletters by clicking here.

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At the time of publication, Nathan Parmelee had positions in Costco. Fool rules are here.