Home Depot Earnings: Warm Weather Drives Double-Digit Profit Growth

S&P 500 (NYSE:SPY) component Home Depot Inc. (NYSE:HD) reported its results for the first quarter. The Home Depot is a home improvement retailer that sells an assortment of building materials, home improvement and lawn and garden products.

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Home Depot Earnings Cheat Sheet for the First Quarter

Results: Net income for Home Depot Inc. rose to $1 billion (68 cents per share) vs. $812 million (50 cents per share) in the same quarter a year earlier. This marks a rise of 23.2% from the year-earlier quarter.

Revenue: Rose 5.8% to $17.8 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Home Depot Inc. beat the mean analyst estimate of 65 cents per share. Analysts were expecting revenue of $17.81 billion.

Quoting Management: “We saw a stronger-than-expected start to the year, driven by record warm weather and continued demand for core products,” said Frank Blake, chairman & CEO. “I would like to thank our associates for their hard work and dedication.”

Key Stats:

The company has now seen its net income rise for three quarters in a row. In the fourth quarter of the last fiscal year, net income rose 31.9% and in the third quarter of the last fiscal year, the figure rose 12%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 8 cents in the fourth quarter of the last fiscal year, by one cent in the third quarter of the last fiscal year, and by 4 cents in the second quarter of the last fiscal year.

Revenue has increased for four consecutive quarters. Revenue increased 5.9% to $16.01 billion in the fourth quarter of the last fiscal year. The figure rose 4.4% in the third quarter of the last fiscal year from the year earlier and climbed 4.2% in the second quarter of the last fiscal year from the year-ago quarter.

The company’s cost of sales rose 5.7% from a year earlier. Last quarter, cost of sales was 65.3% of revenue, similar to the prior-year quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the second quarter has moved up from 97 cents a share to 98 cents over the last thirty days. Over the past three months, the average estimate for the fiscal year has climbed from $2.75 per to share to $2.90.

Competitors to Watch: Lowe’s Companies, Inc., Builders FirstSource, Inc., Lumber Liquidators Hldgs., Inc., Kingfisher plc, Bricorama SA, and Home Product Center Public Co Ltd.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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