Home Depot Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Home Depot (NYSE:HD) will unveil its latest earnings on Tuesday, August 14, 2012. The Home Depot is a home improvement retailer that sells an assortment of building materials, home improvement and lawn and garden products.

Home Depot Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 97 cents per share, a rise of 12.8% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 98 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 97 cents during the last month. Analysts are projecting profit to rise by 17.8% compared to last year’s $2.91.

Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the first quarter, the company reported profit of 65 cents per share versus a mean estimate of net income of 65 cents per share. In the fourth quarter of the last fiscal year, the company beat estimates by 8 cents.

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Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.43 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.55 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 29% to $12.1 billion while assets rose 19.5% to $17.35 billion.

Stock Price Performance: Between May 14, 2012 and August 8, 2012, the stock price rose $2.91 (5.8%), from $49.88 to $52.79. The stock price saw one of its best stretches over the last year between December 28, 2011 and January 10, 2012, when shares rose for nine straight days, increasing 4.8% (+$2) over that span. It saw one of its worst periods between August 26, 2011 and September 6, 2011 when shares fell for seven straight days, dropping 5.7% (-$1.95) over that span.

Wall St. Revenue Expectations: On average, analysts predict $20.75 billion in revenue this quarter, a rise of 2.6% from the year-ago quarter. Analysts are forecasting total revenue of $73.96 billion for the year, a rise of 5.1% from last year’s revenue of $70.4 billion.

Analyst Ratings: With 14 analysts rating the stock a buy, none rating it a sell and nine rating the stock a hold, there are indications of a bullish stance by analysts.

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

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