The company said earnings for the quarter rose to $1.03 billion, or 46 cents per diluted share, from $795 million, or 35 cents per share, a year earlier.

It was the first non-holiday quarter in which the company's net income topped $1 billion.

The results this quarter were 2 cents a share higher than Wall Street analysts polled by First Call had predicted.

"For them to come in with 46 cents I think just demonstrates just how outstanding the quarter was," retail industry analyst Donald Spindel at A.G. Edwards said. "They indicated that this was the strongest earnings per share gain in eight years on a quarterly basis."

Sales in the quarter rose to $33.5 billion from $28.4 billion a year earlier.

David Glass, president and chief executive of the Bentonville, Ark.-based retailer, cautioned in a statement ofthe need to "temper our enthusiasm" for the second half of the year because of the strong comparisons the company would face.

Glass, however, said he believed the company's results for the third quarter would be in line with or slightly better than current analysts' estimates."

"Last year they had a very solid, very strong second half, so the comparisons are going to be more difficult," Spindel said. "But certainly we would expect them to be able to continue to show 10 to 15 per cent earnings per share gains in the second half of this year."

Glass added that the company achieved some of the best results in its history, with each of its operating divisions reporting increased operating income as a per cent of sales and surpassing their own plans.

Wal-Mart's store division led profits, posting operating profits of $1.8 billion for the quarter, a 27 per cent increase.

Net income for the first six months of the year jumped 29 per cent to a record $1.862 billion, or 83 cents per diluted share compared,with $1.447 billion, or 64 cents a diluted share, for the prior fiscal year.

Wal-Mart stock ended 94 cents higher at $64 on the New York Stock Exchange, recovering from a session low of $61.125 reached in morning trade amid a sharp broad market selloff.