I see some huge problems with Wal-Mart’s “profit” story.

First, improved earnings are largely a mirage, because “Inventories declined 4.1% to $38.8 billion.” Translation: Wal-Mart delayed a couple billion dollars worth of re-stocking. Then, sales were actually lower if you exclude fuel sales.

So, they saw EPS rise from 80 cents to 84 cents. That’s a 5% rise in gross profits over the past year–not too shabby, right? Uh, wrong. What no one wants to look at is this fact: sales and earnings figures are not adjusted for inflation. Marketwatch informed us yesterday in a “dollar is falling” story that the US dollar is down by almost 16% just since March, against the 16 major currencies of our trading partners.

So Wal-Mart has a 5% increase in earnings, priced in a currency that’s lost at least three times that much in international trade value. That’s not an increase in profits, it’s a decrease. In constant dollars, Wal-Mart’s profits are way down, not up.

It’s a symptom of media corruption (and stunning ignorance) when every news-writer studiously ignores the fact of declining dollar value. Market-wash is still living in Orwell’s 1984: War is Peace, Poverty is Wealth, Losses are Earnings.

- woodsmoke52

Related Posts:

• Where is your money going to go?
• Many companies beat their earnings expectations by lying about their earnings to the public.
• Consumer confidence continues low, despite how much the market has rallied.
• I see bears are firing up the BBQ grills.
• No inflation, clearly deflation.

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