Arkansas Business

Analysts and investors have mixed expectations about Wal-Mart's first-quarter earnings results, which the retailer will release Thursday.

Here's the consensus estimate: Earnings up about 6 percent to $1.15 a share, and revenue up 3 percent to $116.4 billion. According to Forbes, most analysts rate the world's largest retailer at a "buy."

Some analysts are worried, though. Brian Sozzi, CEO of research firm Belus Capital Advisors, tells Investors Business Daily about his concerns over "bare shelves in the food section and to a lesser extent in the sporting goods. If that was a widespread problem, he adds, the company may miss its sales estimates."

Bare shelves is a problem others have noticed, including the New York Times, which in April filed this report about poorly stocked shelves and an employee shortage.

Meanwhile, Citigroup analyst Deborah Weinswig has removed Wal-Mart stock from Citi's top picks list. She tells MarketWatch that some retailers were affected by a delay in tax returns and lingering cold weather, which put off sales of warm-weather merchandise and garden supplies.

"We are concerned that soft sales continued into March and April," she said. "We believe the impact of higher payroll taxes became a significant headwind."

But on the upside, Sozzi thinks shoppers received their tax returns in time to spend them with Wal-Mart during the first quarter. He also says lower gas prices will also help make this a "good" period for the retailer.

"The quarter started off slow for discounters," he told IBD. "But as tax refunds hit the mailboxes in the back half of the quarter, it looks like consumers responded and went to the stores and bought for Easter and in advance of Mother's Day."

We'll get the complete picture of Wal-Mart's quarter Thursday morning before the market opens.

Bloomberg reported Tuesday that bankers have asked the Federal Reserve to increase its oversight of the financial services offered by the world's largest retailer, Wal-Mart Stores Inc. of Bentonville.

Wal-Mart, which has long been interested in expanding its financial offerings into bank-like services (or, heck just outright founding banks), has recently partnered with American Express to offer a prepaid card called Bluebird. Wal-Mart bills the Bluebird service as an alternative to checking and debit accounts, and includes services like bill pay, direct deposit and ATMs.

According to Federal Reserve meeting minutes from December obtained by Bloomberg, the banks believe Wal-Mart has found a back door into the industry that has little to no Fed oversight:

The council urged the Fed to consider limiting payment- related services to “regulated banking institutions,” or at least step up its study of the business. It also said the Consumer Financial Protection Bureau, created by the 2010 Dodd- Frank law, should supervise non-bank companies that provide financial services.

As we noted, this isn't the first time Wal-Mart's ambitions have raised eyebrows among traditional banks.

In 2006, Wal-Mart applied to open an industrial bank in Utah, where it would handle electronic payment processing. At the time, Wal-Mart said the bank would sponsor credit card, debit card and electronic check transactions and nothing more. But banks feared the retailer would use the bank to eventually offer other services. Wal-Mart withdrew the application in 2007, citing "manufactured controversy."

Since then, Wal-Mart has invested in in-store services like check cashing, money orders, bill payment and money transfers through its Money Centers. But it hasn't forgotten straightforward banking: the retailer established Banco Wal-Mart in Mexico in 2008.

Politico, following up on Arkansas Business reporter Kate Knable's interview (published Monday), with Mike Huckabee, finds the former Arkansas governor and presidential candidate still working out whether he'll return for another year of his eponymous radio show.

As Knable reported for this week's edition of Arkansas Business, Huckabee plans to decide this month whether he'll return for another year of "The Mike Huckabee Show," which is carried by Cumulus Media:

“Within the next month, I’ll decide if I want to continue it or not. I know we will, but it’s just such an incredibly intensive process that I really have to decide that I want to spend that kind of time…,” he said.

“I’ve got to always weigh how much time I’m putting in it and what the return is. How long it will take to make it what I call hopefully disgustingly profitable. That’s what one always hopes for in a deal like this.”

Cumulus, you might have noticed, is already in tussle with its star political provocateur, Rush Limbaugh, who says he's considering taking his talents to another company. Cumulus CEO Lew Dickey has blamed the company's advertising losses on comments Limbaugh made in 2012 about Sandra Fluke, whom Limbaugh called "a slut."

One could argue that Huckabee, who many consider the likable Limbaugh alternative, is well positioned to benefit from a Cumulus-Limbaugh break-up, as shattering as could be for the company. At any rate, it's an interesting time for Huckabee to be making statements like this to Politico today:

"I anticipate going forward, but we're at a decision point in the contract and hopefully all parties will agree to the terms and we will keep growing the show as we have from 50 affiliates to 225 in just over a year." 

We'll stay tuned.

The life story of northwest Arkansas real estate developer and former University of Arkansas football star Jim Lindsey not only sounds like something from a movie, it is actually becoming a movie.

Lindsey, who grew up in rural Arkansas, starred for Razorbacks' national championship football team and became a successful developer after a pro football career, is the subject of an upcoming documentary set for a fall release. The project is titled "The Jim Lindsey Story" and will be narrated by Dallas Cowboys owner Jerry Jones.

Here's the trailer:

Jones and Lindsey were teammates on the Arkansas teams that between 1963-65 won 22 straight, including the 1964 national championship. They remain close friends.

"He was my bus riding partner. We would talk about our dreams, our ambitions," Jones said. "I remember his insight into life was amazing at such a young age."

Lindsey, a native of Forrest City, was a second round draft pick by the Minnesota Vikings in 1965. He bought land in northwest Arkansas with his a $75,000 signing bonus and eventually grew a development business into a real estate company and a successful apartment and golf course operation. Lindsey now owns and operates more than 37,000 apartment units and 42 golf courses.

Lindsey & Associates ranks third on Arkansas Business' recent list of largest residential real estate agencies. Last year the agency reported $358.92 million in sales.

Promotional material describes the film as a "Southern success story. … about a delta boy who went from the henhouse to the penthouse."

Among those interviewed for the film are College Football Hall of Fame coach Frank Broyles, former Arkansas head coach Ken Hatfield, former NFL players Fred Cox and Dave Osborn, and Pro Football Hall of Fame coach Bud Grant.

"The documentary shows how he evolved from a child to the influence he is today," Jones said. "It depicts his will, desire and ambition to achieve."

Clint Fullen, who has a master's in documentary filmmaking from the University of Arkansas and a pair of undergraduate degrees from the UA, is the film's director and producer. Fullen's work has been featured on "PBS Frontline" and "PBS Planet Forward."

Emmy Award winners Larry Foley and Dale Carpenter serve as executive producers.

Wal-Mart Stores Inc. of Bentonville has regained the top spot on Fortune magazine's annual list of the country's largest corporations, released Monday. Meanwhile, Windstream Corp. of Little Rock joined the list for the first time, ranking No. 414.

Wal-Mart, which ranked No. 2 on the list behind Exxon Mobil last year, ranked No. 1 with $469.2 billion in fiscal 2012 revenue. Exxon ranked No. 2 with $449.9 billion. Chevron ranked No. 3 with $233.9 billion.

Windstream, at No. 414, reported revenue of $6.3 billion. The broadband and wireline telecommunications firm's inclusion on the list list comes about seven years after it formed as a spinoff of Alltel Corp.'s wireline assets. Windstream vaulted into the top 500 thanks to its $2.3 billion purchase of Peatec Holding Corp. in December of 2011.

Other Arkansas companies made the list.

• No. 93 - Tyson Foods Inc. of Springdale, which reported $33.3 billion in revenue.
• No. 104 - Murphy Oil Corp. of El Dorado, at $28.8 billion.
• No. 378 - Dillard's Inc. of Little Rock, at $6.8 billion.
• No. 486 - J.B. Hunt Transport Services Inc. of Lowell, at $5.1 billion. J.B. Hunt was not on the list last year.

While Wal-Mart was ranked No. 1 by revenue, it was No. 7 in terms of net income, behind Exxon Mobil, Apple, Chevron, J.P. Morgan Chase & Co., Wells Fargo and Fannie Mae.

Wal-Mart’s profit of just under $17 billion represents a profit margin of 3.6 percent. By comparison, Apple’s margin was almost 46 percent and Wells Fargo’s was almost 21 percent.

The margins of other Arkansas companies among the top 500:

• Tyson: 1.75 percent (net income of $583 million on $33.3 billion in revenue).
• Murphy Oil: 3.4 percent ($970.9 million on $28.8 billion).
• Dillard’s: 4.9 percent ($336 million on $6.8 billion).
• J.B. Hunt: 6 percent ($310.4 million on $5.1 billion).
• Windstream: 2.7 percent ($168 million on $6.2 billion).