Massmart Holdings’ full-year headline earnings a share probably rose 34 percent at most, falling far short of expectations and sending its shares down as much as 5.1 percent, the local unit of Walmart said yesterday.

The third-largest local retailer by market value said headline earnings a share in the 52 weeks to June 24 probably came in between R5.494 and R5.797, compared with the prior year’s R4.333.

Six analysts polled by Thomson Reuters had expected the company to deliver 66 percent profit growth.

Headline earnings a share before foreign exchange effects and costs related to Wal-Mart Stores’ purchase of a controlling interest in the retailer rose to as much as R6.80 compared with R6.414 the year before.

The company said that the Walmart costs primarily related to transaction costs incurred in the prior year and integration costs incurred in the current year. Greater detail would be provided when it released its results on August 22.

Yesterday shares in Massmart, which owns Makro, Game and Builders Warehouse, dropped as much as 5.1 percent by mid-afternoon. The stock recouped some losses to close 3.13 percent down at R170.

On July 4, Massmart said full-year sales increased 16 percent to R61.2 billion, a touch above analysts’ estimates of R61.1bn.

“These shares have been priced for perfection, so even if they are good results there are risks of being knocked back at these levels,” Ferdi Heyneke, a trader at Afrifocus Securities, said yesterday.

Massmart shares have climbed 28 percent since Bentonville, Arkansas-based Walmart, the world’s biggest retailer, announced on June 20, 2011, that it had acquired a 51 percent stake in the Johannesburg-based company for R16.5bn.

Massmart trades at 35.09 times historical earnings, compared with the JSE general retailers index, which has a price:earnings multiple of 13.43. – Reuters and Bloomberg