UPDATE 3-Mexico's Walmex 4th-qtr net rises; misses view

(Adds analyst quote, paragraph 7)

By Cyntia Barrera Diaz

MEXICO CITY, Feb 7 (Reuters) - Top Mexican retailer Wal-Mart de Mexico, or Walmex, posted a lower-than-expected 3.9 percent rise in fourth-quarter net profit as aggressive promotions increased costs and expenses.

Walmex (WALMEXV.MX: Quote, Profile, Research), a unit of top global retailer Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research), earned 4.725 billion pesos ($434 million) in the October-December period. Results were below a forecast of 4.885 billion pesos in a Reuters poll.

In the fourth quarter of 2006, net earnings jumped 19 percent.

Quarterly sales rose 7 percent to 67.13 billion pesos, up from 62.91 billion pesos in the year-ago period. Including other income, total revenue was 67.33 billion pesos.

"Throughout 2007, our company faced important challenges: contracting consumption growth rates and a tough comparison with the previous year," Walmex Chief Executive Eduardo Solorzano said in a statement.

Walmex and other retailers are being hurt by a slowdown in the Mexican and U.S. economies, which mean waning remittances from relatives abroad and more cautious purchases from customers.

"It was a weak quarter because of the (economic) environment. We are in a period of weak consumption, which is likely to continue in the first and second quarter of 2008," said Marisol Huerta, an analyst at Actinver brokerage in Mexico City.