No apologies for getting you excited Forlan, but sorry for giving the wrong into.
I meant to say Lowe's beat expectations.
Lowe's profit beats but year view cut
Mon Nov 17, 2008 2:28pm EST Email | Print | Share| Reprints | Single Page | Recommend (0) [-] Text [+]
ATLANTA (Reuters) - Lowe's Cos (LOW.N: Quote, Profile, Research, Stock Buzz) reported higher-than-expected quarterly profit on Monday as sales etouch doors helped offset weakness in big-ticket projects, sending shares up 8 percent.
The second-largest home improvement retailer behind Home Depot (HD.N: Quote, Profile, Research, Stock Buzz) also cut its full-year forecast, saying rising unemployment, falling home prices and tight credit would continue to pressure its business. But analysts noted the company's new earnings view was only modestly lower.
"Unlike others where guidance is going significantly lower, it is possible that we are much closer to the bottom with Lowe's expectations, setting the stage for outperformance in 2009," Credit Suisse analyst Gary Balter said in a research note.
The retailer also forecast profit for the current quarter below Wall Street estimates as the deepening economic crisis led homeowners to put off costlier purchases.
Lowe's earned $488 million, or 33 cents a share, in its fiscal third quarter ended October 31, down 24 percent from $643 million, or 43 cents a share, a year earlier.
Analysts had expected 28 cents a share, according to Reuters Estimates.
Sales rose 1.4 percent to $11.7 billion. Sales at stores open at least a year, an important retail measure, fell 5.9 percent.
Balter noted that gross margins, aided by hurricane-related sales in the U.S. Gulf region, declined less than expected in the quarter.
Lowe's and industry leader Home Depot have posted weak results and cut store growth as the U.S. housing slump and tight credit curtail demand for big-ticket home improvement projects.
The third quarter marked the fifth consecutive quarterly profit fall for Lowe's, and Home Depot is expected to report its ninth-straight decline in quarterly profit on Tuesday.
"A portion of the merchandise Lowe's sells is big-ticket that has to be financed with credit," said Jon Fisher, a portfolio manager with Fifth Third Asset Management. "There's just no credit available and consumers aren't in a position to be borrowing money."
Lowe's said quarterly sales of basic maintenance and outdoor products were relatively solid, while hurricane-related repairs in the Gulf Coast aided results. But overall sales weakness in the last week of October continued into November as economic conditions worsened, it added.
"We expect continued, broad-based external pressures on our industry, as rising unemployment, falling home prices, tight credit and volatile equity markets continue to erode consumer confidence and impact sales," Lowe's Chairman Robert Niblock said in a statement.
The Mooresville, North Carolina, retailer said it now expects profit of $1.46 to $1.54 a share for the full year, down from a forecast of $1.48 to $1.56 a share it stood by in September. A year earlier, Lowe's earned $1.86 a share.
Lowe's said it expects earnings of 8 to 16 cents a share for the current fourth quarter. Continued...
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