Home Depot earnings top targets

/ Source: The Associated Press

The Home Depot Inc., the nation's largest home improvement store chain, reported a nearly 17 percent jump in third-quarter earnings on strong sales, beating Wall Street expectations. The company boosted its earnings per share growth guidance for the year.

For the three months ending Oct. 30, Home Depot said Tuesday it earned $1.54 billion, or 72 cents a share, compared to a profit of $1.32 billion, or 60 cents a share, for the same period a year ago.

Analysts surveyed by Thomson Financial were expecting earnings of 68 cents a share in the third quarter.

Revenue in the three-month period rose 10.5 percent to $20.74 billion, compared to $18.77 billion recorded a year ago.

Same-store sales — a measure that compares sales at stores open at least a year — rose 3.6 percent in the quarter. Home Depot's average sales ticket increased 6.1 percent in the quarter to $58.92.

Home Depot said it was lifting its earnings per share growth guidance for 2005 from 14 percent to 17 percent to 17 percent to 18 percent. It also increased its sales growth guidance for the year from 9 percent to 12 percent to 10 percent to 12 percent.

In the third quarter, Home Depot said it benefited from rolling out new products and growth in its home installation business.

“I’m pleased with the progress we’ve made on the strategy we’ve laid out the last four years,” said Bob Nardelli, Home Depot’s chief executive.

He said the “nimble” company performed well despite the spate of hurricanes to hit the Gulf Coast and Florida and is positioned to help supply the recovery from the storms. In particular, the sales of energy-related merchandise, such as programmable thermostats, have surged in the storm’s aftermath.

“In most communities, we were the last to close and the first to open,” he said.

The company said only two stores remained closed from the hurricane’s damage.

For the first nine months of the year, Home Depot said it earned $4.55 billion, or $2.11 a share, compared to earnings of $3.96 billion, or $1.78 a share, for the same period a year ago. Nine-month revenue was $62.02 billion, compared to $56.28 billion recorded a year ago.

Home Depot ended the quarter with 1,972 stores in the United States, Canada and Mexico.

On Monday, Lowe's Cos., the nation's second-largest home improvement store chain, said its earnings rose nearly 26 percent in the third quarter, surpassing Wall Street's forecast. The Mooresville, N.C.-based retailer earned $649 million for the quarter. Sales at Lowe's stores open at least a year increased 6.2 percent in the quarter.