Home Depot (HD) Earnings Beat Estimates, Raises Forecast

Shares of Home Depot Inc. (HD) closed up +0.71 or +0.89 percent to $80.38 per share on Tuesday, after the company announced a better than expected third quarter profit. In addition, the company raised its forecast for its 2013 year-end results for the third time. Home Depotâ s quarterly profit beat analyst estimates for the sixth consecutive quarter, giving a clear indication that the U.S. housing market continues improving.

The housing market had been depressed since the sub-prime mortgage fiasco that was a direct cause of the 2008 financial crisis.
Atlanta, Georgia based The Home Depot Inc. is a big box format retail chain and the largest home improvement retailer in the world. The Home Depot specializes in construction and home improvement products and operates 2,260 stores in all 50 states in the U.S., Washington D.C. and Puerto Rico, the U.S. Virgin Islands, Guam, Mexico and 10 provinces in Canada. Third quarter sales were up +7.4 percent to $19.5 billion compared to the same period one year ago, with comparable store sales showing a positive +7.4 percent increase globally and +8.2 percent for U.S. stores. Analysts on average expected sales to come in at $19.18 billion. Home Depot net earnings for the third quarter came to $1.4 billion, or $0.95 per diluted share, compared with $947 million, or $0.63 per diluted share in the same period one year ago. For fiscal 2013â s third quarter the company reported diluted earnings per share had increased +50.8 percent over the same period last year. 2012 results reflect a nonrecurring charge of about $165 million, or $0.11 per diluted share as a result of closing seven stores in China. Overall, on an adjusted basis, the company reported a +28.4 percent increase in diluted earnings per share versus the same period last year. Due to the improvements the company has made in distribution, cost cutting and directed marketing and merchandising, The Home Depot raised its year end estimate for 2013 earnings to $3.72 per share, versus a previous estimate of $3.60. The company also revised yearly growth estimates from +4.5 percent to +5.6 percent. In the companyâ s press release announcing earnings, Frank Blake, chairman & CEO stated, "Our third quarter results reflect the continuing improvement in the housing market and our solid operational performance," he continued "I would like to thank our associates for their hard work and dedication." The Home Depotâ s earnings results indicate the U.S. housing market continues rebounding, despite a recent rise in long-term mortgage rates. In a conference call with analysts, CEO Blake noted that, â

Published on Nov 20, 2013
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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