ATLANTA – A boost from the gradually recovering housing market helped Home Depot’s net income edge up in its fiscal third quarter.
Its results beat Wall Street’s expectations, and its shares rose almost 2 per cent in early premarket trading.
Home improvement retailers like Home Depot have benefited from the slowly recovering housing market. Last week a measure of U.S. home prices reported by real estate data provider CoreLogic climbed the most in six years. And low interest ratings are making it attractive for those that can afford purchases.
New home sales jumped last month to the highest annual pace in the past two and a half years. And while sales of previously occupied homes dipped in September, they have risen steadily in the past year.
For the period ended Oct. 28, Home Depot Inc. reported net income of $947 million, or 63 cents per share. That’s up from $934 million, or 60 cents per share, a year earlier.
Excluding a charge for closing some stores in China, earnings were 74 cents per share.
That topped the 70 cents per share that analysts surveyed by FactSet predicted.
Revenue rose more than 4 per cent to $18.13 billion. Wall Street expected $17.92 billion.
Home Depot’s stock added $1.09, or 1.8 per cent, to $62.25 in premarket trading.
“Our third-quarter results were better than we expected and reflected, in part, what we believe is the start of the path toward the healing of the housing market,” Chairman and CEO Frank Blake said in a statement on Tuesday.
The Atlanta company posted strong sales in the U.S., with revenue at U.S. locations open at least a year climbing 4.3 per cent. For the total company, the figure increased 4.2 per cent.
This metric is a key gauge of a retailer’s health because it excludes results from stores recently opened or closed.
For the year, Home Depot now anticipates revenue will climb about 5.2 per cent. Based on 2011’s revenue of $70.4 billion, this implies $74.06 billion. Home Depot’s prior forecast was for a 4.6 per cent increase, which implied revenue of $73.63 billion.
Analysts expect earnings of $2.99 per share on revenue of $73.68 billion.
Home Depot runs more than 2,200 stores in the U.S. and around the world. Its smaller rival Lowe’s Cos. reports its earnings Monday.