Home Depot tops $1 billion in quarterly profits
Tuesday, August 20th 2002, 12:00 am
By: News On 6
ATLANTA (AP) _ The Home Depot Inc. topped $1 billion in quarterly profits on Tuesday, kept its chief competitor in check and quieted restless investors with a 28 percent increase in second-quarter earnings.
The Atlanta-based company, the nation's largest home improvement retailer, joined Wal-Mart in an elite club of only two retailers to ever achieve more than $1 billion in earnings in a quarter.
Home Depot reported earning $1.18 billion, or 50 cents per share, in the three months ended Aug. 4. In the same quarter last year, Home Depot earned $924 million, or 39 cents a share.
Analysts surveyed by Thomson First Call expected earnings of 47 cents per share.
Shares of Home Depot rose 4.2 percent, or $1.22 per share, to close Tuesday at $30.25 on the New York Stock Exchange.
While Home Depot could not match the 42 percent increase in second-quarter earnings posted by rival Lowe's Cos. on Monday, it keeps a strong hold as the No. 1 home improvement company in the nation, said Alan Rifkin, a Lehman Brothers analyst.
``Home Depot's vital signs ... are clearly superior to Lowe's in every facet,'' Rifkin said. ``But what Wall Street rewards is rate of change, and Lowe's rate of change is superior.''
Lowe's profit for the quarter was $467 million, or 59 cents a share.
Home Depot's sales for the second quarter increased 12 percent to $16.3 billion, as it added 51 new stores. That compares with $14.6 billion in sales a year ago.
Home Depot now has 1,437 stores in the United States and Mexico.
Wal-Mart first crossed the $1 billion earnings mark in early 1995 following a prosperous holiday season. For the three months ended July 31, it earned $2.04 billion, or 46 cents per share.
``We are reporting the most profitable quarter in company history. No matter how you look at it ... Home Depot's leadership in the home improvement industry is unquestionable,'' said Carol Tome, chief financial officer. ``We continue to distance ourselves with the best balance sheet against our peers.''
Investors were pleased that Home Depot exceeded expectations and did not back down from ambitious revenue growth targets for the rest of the year, Rifkin said.
Still, Lowe's had wowed investors Monday by raising its full-year estimates, sending its shares up 11 percent. Lowe's shares gained another dollar Tuesday, closing at $42 on the NYSE.
Home Depot said it still expects third-quarter profits to be 40 cents a share _ in line with Wall Street expectations. That would be a 21 percent gain over the year-ago period.
``The long-term trends in home value and home ownership bode well for Home Depot and its business model,'' CEO Bob Nardelli told investors in a conference call.
He said quick product rollouts in appliances, flooring and decorative lighting helped the company's sales.