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05-18-2010, 04:43 PM #1
Home Depot 1Q profits surge 41%
Home Depot 1Q profit jumps as consumers work on homes
By Michelle Chapman, AP Retail Writer
NEW YORK — Home Depot's fiscal first-quarter net income surged 41% as shoppers snatched up seasonal items and the number of customer transactions rose.
This is a positive sign for the No. 1 U.S. home improvement retailer, as consumers cut back on home-improvement projects during the recession and housing slump, and Home Depot responded to those weak sales by scaling back store openings and cutting jobs.
With results getting better, Home Depot (HD) increased its 2010 profit forecast above Wall Street's expectations Tuesday and raised its sales outlook as well.
READ: Home Depot's earnings release
The comeback in the home-improvement business was also fueled by government stimulus programs, including tax credits for home purchases and rebates for energy-efficient products.
The company earned $725 million, or 43 cents a share, for the period ended May 2. That compares with $514 million, or 30 cents a share, a year ago.
Adjusted profit was 45 cents a share.
Revenue rose 4.3% to $16.86 billion. Revenue at U.S. stores open at least a year climbed 3.3%, while revenue at all of the retailer's stores open at least a year increased 4.8%.
This figure is a key indicator of a company's health because it measures results at existing stores rather than newly opened ones.
Analysts polled by Thomson Reuters, whose estimates normally remove one-time items, expected a smaller profit of 40 cents a share on revenue of $16.37 billion.
Home Depot raised its fiscal 2010 forecasts as well. The company now predicts earnings of about $1.88 a share, up from a prior prediction of $1.79 a share. It anticipates sales will climb about 3.5%. The retailer's previous forecast was for an approximately 2.5% increase.
Wall Street expects net income of $1.87 a share on revenue of $68.14 billion for the year.
On Monday rival Lowe's (LOW) reported a 2.7% increase in its first-quarter net income and lifted its full-year outlook, but the guidance was short of analysts' estimates.
Home Depot ran 2,244 retail stores at quarter's end.
http://www.usatoday.com/money/companies ... -depot.htmNO AMNESTY
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