Home Depot's earnings raise the roof
The home improvement chain ran past expectations, hiked its dividend and announced a huge share buyback -- all thanks to a rebounding housing market.
Net income in the last quarter rose 32% to $1.02 billion, or 68 cents, versus $774 million, or 50 cents, a year earlier. Revenue surged 13.9% to $18.2 billion. Excluding one-time items, profit was 67 cents, topping the 64-cent consensus forecast of Wall Street analysts. The revenue figure also exceeded the $17.69 billion Wall Street estimate.
Wall Street isn't reacting to Home Depot's earnings forecast for the year of $3.37 per share, which lagged forecasts of $3.49. After all, rival Lowe's (LOW) also gave disappointing earnings guidance recently, but there are many reasons to be bullish on both stocks.
Home Depot and Lowe's will be plenty busy with Superstorm Sandy-related work for a while longer after it damaged or destroyed more than 600,000 homes in New York and New Jersey alone.
Also, the good news about the housing recovery continues.
The closely watched Standard & Poor's Case-Schiller home-price indexes posted gains in December, reversing a decline in November. Nineteen cities reported increases in home prices. New York area prices, though, slipped, and Chicago's market was little changed. IHS Global Insight argues in a report that housing should continue to gain strength because the economy is growing and adding jobs.
Says IHS: "[I]nventories are dropping because builders are not putting up homes fast enough to meet underlying demand (which mostly consists of replacement demand and demand from newly formed households)."
Home Depot attracts both people who repair their own homes and small contractors. During the latest quarter, the average purchase at the chain was $55.46, an increase of 5.6% from a year ago.
--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] S&P futures vs fair value: -4.80. Nasdaq futures vs fair value: -7.80. U.S. equity futures remain below their flat lines, which has been the case through the course of the night. If the current indication holds, the S&P 500 will take a step back after climbing 1.4% during the first two sessions of the week.
There was no market-moving data released this morning, but the FOMC will reveal the minutes from its latest policy meeting at 14:00 ET. Due to the ... More
More Market News
Excitement is growing about the company's new iPhone, expected this fall.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'