Wal-Mart reports fall in quarterly profits

Wal-Mart said it would invest "aggressively" in e-commerce

The world's largest retailer, Wal-Mart, has reported a 22% drop in quarterly profit and given a weaker-than-expected earnings forecast for the coming year.

Net income for the three months to 31 January fell to $4.4bn (£2.6bn) from $5.6bn a year earlier.

Wal-Mart said tough winter weather, cuts to government benefits and higher taxes contributed to the fall.

Wal-Mart's UK supermarket business, Asda, said like-for-like sales fell 0.1% in the final quarter of 2013.

Investment

Wal-Mart said reduced food-stamp benefits had been partly behind its lower profits, along with competition from heavy discounting during the holiday season.

Comparable sales at its US stores fell by 0.4% in the three-month period. Wal-Mart's total revenue for the quarter rose by 1.4% to $129.7bn.

Wal-Mart said it expected net sales this year would grow at the lower end of its earlier forecast of 3%-5%.

Its earnings forecasts for this year also fell short of analysts' forecasts. Wal-Mart expects profits to be between $5.10 and $5.45 per share, against expectations of about $5.54.

Chief executive Doug McMillon said he would "innovate to improve productivity" to keep prices low.

He added: "We will invest aggressively in e-commerce and increase our small store rollout in the US, as we have done in several other countries, to deliver value and convenience."

The retailer would keep focusing on providing "supercentres" and smaller stores closer to customers' homes, he said.

'Tough year'

In the UK, while Asda's underlying sales fell 0.1% in the final quarter of the year, the supermarket said they were up 0.5% over 2013 as a whole.

The UK's major supermarket chains struggled to boost sales over the Christmas period, coming under fierce competition from discount retailers such as Aldi and Lidl, and from more upmarket offerings from Waitrose and Marks & Spencer.

Asda's chief executive, Andy Clarke, said that 2013 had been a "tough year".

"There's little doubt that the UK retail market is undergoing significant and permanent structural change," he added.

"Though the economy is showing signs of recovery, it is still susceptible to shocks and the benefit is not yet being felt right across the country."

UK bank Barclays reports profits up 92% to £11.6bn

Barclays was not bailed out by the UK government during the financial crisis

Banking giant Barclays has seen its full-year profits increase by 92% to £11.6bn ($18.2bn) in 2009.

The figure was boosted by the sale of its BGI fund management arm to US firm BlackRock last year.

Stripping this out, profits were £5.3bn with £2.5bn coming from its Barclays Capital investment banking business.

The bank, which did not take any direct state help during the financial crisis, also saw the level of its total bonus payouts rise to £2.7bn.

It will pay £1.5bn in bonuses for 2009 and a further £1.2bn to be paid over three years.

Barclays say that banks will be judged by how they conduct their business and how they lend and pay Robert Peston, BBC business editor Read Robert's blog See Barclays' share price

Some 22,000 investment banking staff are receiving £191,000 each on average in salary and bonuses - of which £95,000 is discretionary bonus.

But it said that chief executive John Varley and president Bob Diamond had turned down bonuses for the second consecutive year, given "intense public interest and concern" about bankers' pay.

The large profits enjoyed by bankers have prompted widespread public anger because the banking sector was widely perceived to have taken dangerous risks which led to the global recession.

Banks defended

Barclays opted not to join the UK government's bail-out scheme for banks, instead opting to rebuild its finances using funds from the Middle East.

However, BBC business editor Robert Peston said some would argue it had benefitted indirectly "from a windfall generated by the emergency rescue of the global economy undertaken by governments and central banks, an emergency rescue that was needed in large part because of the havoc wreaked by the excessive risk taking of banks".

Former banker Barbara Stcherbatcheff and economic expert Sean Rickard on the link between bonuses and profits

Last week, Mr Varley defended the role of big banks in the global financial system.

Appearing in front of the Treasury Committee, he said that big banks were not necessarily riskier than small banks.

Barclays said it had loaned about £35bn to businesses and households in the UK in 2009, having promised in April to lend at least £11bn.

The willingness for banks to lend is seen as an important factor for economic recovery.

Shares in Barclays were up by more than 7% in early Tuesday trading.

The results were "further proof that Barclays has skilfully woven its way through the recessionary minefield", said Richard Hunter of Hargreaves Lansdown stockbrokers.

"With or without the sale of BGI, the figures are extremely impressive".

"Today's announcement reiterates Barclays' position as a major global force, whilst also setting the standard in kicking off the UK banking reporting season. "