Home Depot versus Lowe’s: Earnings Tale of the Tape

Home Depot (NYSE:HD) and its rival Lowe’s Companies, Inc. (NYSE:LOW) reported third quarter earnings this week. Home Depot’s numbers painted a positive picture while Lowe”s president was open about his disappointment with the numbers.

Home Depot: Home Depot (NYSE:HD) reported its third quarter earnings per share of $0.60 beat estimates by $0.02 while its $17.3 billion revenues (a 4.4 percent year over year) also exceeded estimates by $200 million. Comparable store sales growth rose 4.2 percent with a fiscal year 2011 earnings forecast set at $2.38.

Additional positive numbers included customer transaction increases of 1.2 percent year over year with an average ticket rising three percent. The company increased its quarterly dividend by 16 percent to $0.29 percent with a 50 percent dividend payout target.

In the company’s third quarter earnings conference call, its CEO said the company’s strongest geographic region for the quarter was in the west, suggesting that revenue increases were greater as opposed to Hurricane Irene-related spending.

The stock closed at $37.88 on Friday, up .69 percent.

Lowe’s Companies, Inc.: Lowe’s (NYSE:LOW) reported its third quarter earnings per share of $0.35 beat analysts’ estimates by $0.02 with its $11.8 billion revenues (a 2.3 year over year increase) in-line with expectations.

In negative news for the report, Lowe’s profit declined 44 percent year over year from store closings charges and discontinued projects. The company projected fourth quarter comparable store sales growth of one percent but lowered its view of full-year earnings per share to $1.37-$1.40 from prior guidance of $1.48-$1.54.

Its chairman, president and CEO Robert A. Niblock, Lowe’s chairman, said in a press release,

 “Our performance is not at the level we expect relative to the market.  We are making the changes necessary to right size the organization, improve speed to market and enhance the shopping experience. We are keenly focused on improving our core business while also developing new capabilities and services for the future. I am confident we are moving forward on a clear path that is not dependent on an unlikely near-term economic recovery.”

The stock closed at $23.31, down 0.30 percent.