updated 8/19/2008 11:58:28 AM ET 2008-08-19T15:58:28

The Home Depot Inc. said Tuesday that its second-quarter profit sank 24 percent and reiterated its downbeat outlook for the year amid a weak housing market that shows no signs of recovery.

For the three-months ending Aug. 3, the nation’s largest home improvement chain said its net income fell to $1.2 billion, or 71 cents per share. That’s down from $1.59 billion, or 81 cents per share, during the same period last year.

Meanwhile, revenue slid 5.4 percent to $21 billion, down from $22.2 billion last year. And same-store sales, an important retail industry metric of sales at stores opened at least a year, fell 7.9 percent.

The results handily beat expectations as do-it-yourselfers began to take their hammers and paint brushes out of retirement. Analysts surveyed by Thomson Reuters had projected earnings of 61 cents per share on revenue of $20.58 billion.

Goldman Sachs analyst Matthew Fassler told investors in a research note that the better-than-expected results indicate a “reprieve” from an earlier slowdown by shoppers who postponed projects as the nation’s housing market slows.

“These results confirm that the DIY market received a reprieve from some combination of better weather, fiscal stimulus, and a floor in demand,” he wrote.

Still, the results paint a grim picture of the cost-conscious American consumer.

The company said comparable sales were negative for each of the company’s selling departments and the average spending per customer in a visit fell 1.2 percent to $57.58.

But a bright spot was basic repair jobs that are shoppers are undertaking, even as bigger-ticket purchases continue to fall, executives said.

“Customers are spending to maintain their homes,” said Craig Menear, Home Depot’s executive vice president of merchandising.

Amid so much economic uncertainty, Home Depot said it expects earnings per share from continuing operations to decline by 24 percent for the year. The company had said in May that it felt “more comfortable” that it would meet the low end of its full-year guidance for a drop of 19 percent to 24 percent in earnings per share, but did not elaborate.

The earnings per-share guidance does not include the company’s charge related to the closing of 15 stores and its reduction of 50 stores from its future expansion plan, the company said.

Home Depot also projects that full-year sales should decline by 5 percent.

“As we look forward into the second half of the year, we see continued pressure on our markets,” Chief Executive Frank Blake told investors during a conference call.

Home Depot’s results come on the heels of better-than-expected second-quarter results from competitor Lowe’s Cos. Inc.

The Mooresville, N.C.-based company said second-quarter profit fell nearly 8 percent, but managed to top Wall Street expectations. The company offered a weaker-than-expected outlook for the third quarter, but raised its guidance for the full year.

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