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Wal-Mart warns on 3Q
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August 9, 2000: 4:36 p.m. ET
Retail chain sees slightly lower earnings compared with 20% sales gain in 2Q
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NEW YORK (CNNfn) - Wal-Mart Stores Inc. posted record second-quarter earnings to meet forecasts Wednesday. However, the company issued a warning on third-quarter profit expectations, prompting investors to shed the stock.
In addition, Federated Department Stores Inc. reported a smaller-than-expected drop in profitability.
Wal-Mart, the nation's largest retailer and a component of the Dow Jones industrial average, recommended during a conference call Wednesday that analysts lower their third-quarter expectations to 31 cents a share from 33 cents a share to reflect a change in accounting for layaway purchases.
The company said it was comfortable about meeting the revised number, anticipating stepped-up sales as the back-to-school season kicks into gear.
 Shares of Wal-Mart (WMT: Research, Estimates) fell 4-1/4 to 53-3/8 late Wednesday before the close.
For the second quarter ended July 31, the company said it had net income of $1.6 billion, or 36 cents a share, in line with the forecast of analysts surveyed by earnings tracker First Call. A year earlier, the company earned $1.3 billion, or 28 cents a share.
Revenue rose 20 percent to $46.1 billion. Sales at stores open at least a year, a closely watched measure known as same-store sales, gained 5.4 percent.
Fingerhut unit hurts Federated earnings
Cincinnati-based Federated, which operates such chains as Bloomingdale's, Macy's and Stern's, said higher reserves for bad debt at its Fingerhut unit hurt results. The company previously warned of those problems.
 Federated had net income or $63 million, or 30 cents a share, down from $137 million, or 61 cents a share, a year earlier. The results topped the lowered forecast of 26 cents a share. The company said that without the bad debt problems, net income would have come to 74 cents a share, above the 72 cents-per-share estimate before the company's warning.
Sales edged up 1.5 percent to $4.1 billion from $4.0 billion a year earlier, and same-store sales gained 1.9 percent.
Shares of Federated (FD: Research, Estimates) lost 7/8 to 24-1/2 in trading Tuesday. 
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