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Title: WalMart Carnage: Stock Plummets Most In 17 Years After Slashing Earnings Guidance, Blames Wage Hikes
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URL Source: http://www.zerohedge.com/news/2015- ... hing-guidance-sees-12-eps-drop
Published: Oct 14, 2015
Author: Submitted by Tyler Durden
Post Date: 2015-10-14 13:35:43 by HAPPY2BME-4UM
Keywords: None
Views: 21
Do you see what happens Larry when Wal-mart succumbs to "progressive" pressure and hikes wages? This: More from Reuters: The summary from WSJ: Wal-Mart, which is hosting a meeting with analysts today, also said it projects per-share earnings to decline by 6% to 12% in its next business year. Analysts, according to Thomson Reuters, have anticipated $4.73 in per-share profit for fiscal 2017, higher than the $4.54 expected for 2016. “Fiscal year 2017 will represent our heaviest investment period,” said Charles Holley, Wal-Mart’s Chief Financial Officer. Operating income will be affected by previously announced investments, Mr. Holley said. Those investments include about $1.1 billion in e-commerce and digital initiatives. By fiscal 2019, Wal-Mart said it expects earnings per share to rise 5% to 10%. Separately on Wednesday, Wal-Mart said its board approved a new $20 billion share repurchase program, replacing the $8.6 billion remaining on its program authorized in 2013. In August, the retailer warned its profits would suffer this year as it steps up spending amid increasing competition. The company’s investments on behalf of customers have crimped profits but helped reverse a sales slump: Sales at U.S. stores open for at least a year rose 1.5% in the most recent quarter, the fourth quarterly increase after a long period of decline. Yes, the company just slashed its 2017 earnings forecast by up to a whopping 12%... but at least the workers are happy, if not so much the market as WMT stock plunges the most since Lehman February 2000 September 1998, and has lost more market cap than Twitter. Carnage: The news spread quickly, in the process blowing up WMT's bid/ask spread (chart courtesy of nanex) Sending the dividend yield to record highs... Dropping WMT below $200bn market cap (and AMZN now $56bn larger)... We are sure these analysts will be explaining how the market has it all wrong... Not even the company announcing a just as surprising $20 billion stock buyback is helping it. Oh and speaking of "happy workers", now that WMT has just become an activist target, and eliminate any growth CapEx for the next 4 years, expect the company to proceed with the logical next step after it hikes wages: massive layoffs. Congratulations American workers: you lose again! 
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