Home Depot Shares Tick Up On Earnings Beat, Dividend Increase

Feb 25 2014, 9:03am CST | by

The largest home improvement retailer in American is optimistic about the housing market. Home Depot beat Wall Street’s earnings expectations, reported its best same store sales since 2000 and added to its quarterly dividend.

The Home Depot reported $17.7 billion in fourth quarter revenue, down 3% from the same period in 2012 and somewhat behind Wall Street analysts’ consensus estimate. The company attributes the decline to a shortened quarter, saying that the 14th week in the prior year added $1.2 billion in sales. Excluding the extra week, fourth quarter sales were up 3.9% from 2012 to 2013.

Same store sales gained 4.4% during the quarter with domestic stores gaining 4.9%. Net earning came in at $1 billion, in line with the previous year quarter. Earnings per share were 73 cents, beating the Street estimate by 2 cents. Citi analyst Kate McShane wrote in a note that same store sales were light of expectations for 4.6%. However, she wrote that this may be due to “recent inclement weather.”

Full year revenue gained 5.4% from the prior year coming in at $78.6 billion (versus a $78.8 billion estimate). Same store sales gained 6.8% and net earnings came in at $5.4 billion up 18.7% from the previous year. Per share earnings were $3.76. CEO Frank Blake noted in a statement that the recovering housing market helped the company post its strongest same store sales growth in 14 years.

Buoyed by the success the company also announced a 21% increase to its quarterly dividend to 47 cents.

Looking ahead the company expects revenue growth of around 4.8% and same store sales growth of about 4.6%. Home Depot expects earnings per shares to gain 16.5% to $4.38 after an anticipated $5 billion in share buybacks. Citi’s McShane optimistically noted that there may be “a degree of conservatism”in the company’s same store sales guidance given the slight beat this quarter.

Shareholders also seem to be taking the report in stride. The Home Depot stock was up around 2% morning trading Tuesday going as high as $80.08.


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Source: Forbes Business

 
 
 

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