Wal-Mart, the largest retailer in the world, reported fourth quarter adjusted earnings of $1.17 per share Thursday morning.

The figure is $0.05 above its latest guidance and $0.05 above Wall Street expectations.

Total quarterly sales grew 4.6 percent year-on-year. U.S. Wal-Mart sales decreased 0.5 percent and Sam's Club sales increased 3.8 percent. International sales grew 19.5 percent.

Wal-Mart CEO and President Mike Duke expects continued strong growth from International sales but cautions that U.S. sales will be more challenging in the first quarter, as Walmart U.S. cycles through strong year-over-year comparisons and deflation. Duke does expect improvement in U.S. sales as the year progresses.

The largest US employer aside from the government expects $0.81 to $0.85 earnings per share for the first quarter of this fiscal year and an EPS of $3.90 to $4.00 for the year 2011. For the year 2010, Wal-Mart's adjusted EPS was $3.66.

Duke attributes Wal-Mart's successful fourth quarter earnings to its Three Strategic Priorities, which are delivering growth, leveraging expenses and improving returns.

The diligent way we managed our businesses and tight control of our costs resulted in the company leveraging operating expenses for the fourth quarter, said Duke, We plan to grow expenses slower than the rate of sales in the new fiscal year.

In pre-marketing trading at 8:15 am, Wal-Mart shares are down 1.54 percent.