UPDATE 3-Wal-Mart's flat profit beats estimates, shares up
* Q2 EPS 88 cents vs Wall St view 85 cents
* U.S. same-store sales down 1.2 pct; market expected rise
* Sees Q3 EPS from continuing ops 78 cents to 82 cents
* Shares up 1.7 pct (Recasts, adds byline, analyst comment, company comments)
SAN FRANCISCO, Aug 13 (Reuters) - Wal-Mart Stores Inc (WMT.N) posted better-than-expected quarterly earnings on Thursday as a clampdown on inventory offset falling sales, and the company forecast a full-year profit that could beat Wall Street estimates, sending its shares up 1.7 percent.
The world's biggest retailer, which now describes itself as "Walmart", said the hold-down on inventory helped it protect margins and avoid costly markdowns as cautious shoppers stuck to buying necessities like food.
The company's better-than-expected profit more than outweighed its weaker-than-planned sales given the tough economy, said Peter Benedict, analyst at Robert W. Baird & Co.
"All these other stocks have had such big runs, it's time for Walmart to play some catch up," he said of the stock's rise.
Net income fell slightly to $3.44 billion from $3.45 billion but earnings per share rose to 88 cents from 87 cents, as the company had fewer outstanding shares in the latest quarter. Analysts, on average, were expecting earnings of 85 cents per share, according to Reuters Estimates.
Total sales fell 1.4 percent to $100.08 billion, pressured by a stronger U.S. dollar, which cut the dollar-value of sales made outside the United States. Sales rose 2.7 percent to $104.28 billion on a constant currency basis.
The results came out on the same day as a U.S. government report showing that sales at retailers fell unexpectedly in July. Other data showed the number of workers filing new claims for jobless benefits rose in the latest week. [ID:nN13227479]
"Short term, we believe the economy will continue to be challenging," said CEO Mike Duke on a recorded call. "We are accelerating our focus on reducing expenses and improving productivity in all of our operations."
SLIPPING SALES
The retailer said sales at U.S. stores open at least a year -- a key gauge known as same-store sales -- fell 1.2 percent. Wall Street, on average, expected a gain of 0.85 percent.
In May, the company said it would stop posting sales on a monthly basis, leaving analysts to guess how it fared in the quarter compared with last year when it was helped by rising food and fuel prices and consumers spending tax rebate checks. Continued...
