Lowe’s Earnings: Profit and Revenues Climb, Cautious on Outlook

S&P 500 (NYSE:SPY) component Lowe’s Companies Inc. (NYSE:LOW) reported its results for the first quarter. Lowe’s Companies is a home improvement retailer offering products to homeowners, renters, and commercial business customers.

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Lowe’s Companies Earnings Cheat Sheet for the First Quarter

Results: Net income for Lowe’s Companies Inc. rose to $527 million (43 cents per share) vs. $461 million (34 cents per share) in the same quarter a year earlier. This marks a rise of 14.3% from the year-earlier quarter.

Revenue: Rose 7.9% to $13.15 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Lowe’s Companies Inc. beat the mean analyst estimate of 42 cents per share. Analysts were expecting revenue of $12.98 billion.

Quoting Management: “We delivered solid results for the quarter, consistent with our expectation at the beginning of the year,” commented Robert A. Niblock, Lowe’s chairman, president and CEO. “While we capitalized on better than anticipated weather during most of the quarter, demand for seasonal products slowed toward the end. “We continue to maintain a cautious view of the housing and macro demand environment, and are focused on what we can control,” Niblock added. “We are building on our core strengths and strategically investing in ways that will better position Lowe’s for success. I would like to express my gratitude to our employees for their continued dedication and customer focus.”

Key Stats:

Lowe’s (NYSE:LOW) has now topped analyst estimates for the last four quarters. It beat the mark by 6 cents in the fourth quarter of the last fiscal year, by 2 cents in the third quarter of the last fiscal year, and by one cent in the second quarter of the last fiscal year.

Gross margin shrank 0.7 percentage point to 34.7%. The contraction appeared to be driven by increased costs, which rose 9.2% from the year earlier quarter while revenue rose 7.9%.

Revenue has risen the past four quarters. Revenue increased 11% to $11.63 billion in the fourth quarter of the last fiscal year. The figure rose 2.3% in the third quarter of the last fiscal year from the year earlier and climbed 1.3% in the second quarter of the last fiscal year from the year-ago quarter.

Net income has dropped 4.6% year-over-year on average across the last five quarters. Performance was hurt by a 44.3% decline in the third quarter of the last fiscal year from the year-earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the second quarter has fallen from 75 cents per share to 74 cents, indicating that analysts are growing pessimistic about the company’s performance next quarter. The average estimate for the fiscal year is $1.86 per share, a rise from $1.79 ninety days ago.

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

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