updated 8/16/2005 12:51:17 PM ET 2005-08-16T16:51:17

Fueled by the nation’s strong housing market, second-quarter profit for No. 2 home-improvement retailer Lowe’s Cos. jumped 20 percent, beating Wall Street estimates.

Net income grew to $838 million, or $1.05 per share, in the period ended July 29, from $700 million, or 87 cents per share, in the same quarter in 2004, the company said Monday. Revenue rose 17 percent to $11.93 billion from $10.17 billion as sales at stores open at least a year increased by 6.5 percent.

Analysts surveyed by Thomson Financial expected earnings of $1.02 per share on revenue of $11.81 billion.

Gains in installed items, special orders and sales to commercial business customers helped boost results, the company said.

Same-store sales increased as “homeowners completed some of their spring weather-delayed projects,” Chief Executive and Chairman Robert Niblock told analysts during a conference call after the results were posted.

Shares of the Mooresville, N.C.-based company rose 21 cents to $65.40 in afternoon trading on the New York Stock Exchange after earlier falling on concerns about slower growth and a conservative outlook, said analyst Brian Postol of A.G. Edwards & Sons.

“Their numbers slowed a little bit at the tail end of the quarter,” he said. “But they accelerated above their expectations, which shows they are taking market share” from market leader Home Depot.

Earnings per share will be 76 cents to 78 cents in the third quarter and $3.31 to $3.37 for the year, Lowe’s said. The consensus estimate of analysts is for earnings of 76 cents a share in the third quarter and $3.29 per share for all of 2005.

Home Depot, based in Atlanta, reports its second-quarter earnings Tuesday.

Lowe’s opened 27 stores, including one relocation, in the second quarter. The company said it expects to open 150 stores by the end of 2005, including 34 in the third quarter.

As of last month, Lowe’s operated 1,138 stores in 49 states.

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