Home Depot 4Q results top Street, OKs $17B buyback
NEW YORK (AP) — Home Depot Inc., the largest U.S. home improvement retailer, said Tuesday its fiscal fourth-quarter net income surged 32 percent, beating expectations, helped by strong U.S. sales and the cleanup related to Superstorm Sandy.
The news follows smaller rival Lowe's Cos. results Monday, which also beat expectations, and is the latest sign that Americans are feeling more comfortable spending money on their homes as the housing market slowly recovers.
"We ended the year with a strong performance as our business benefited from a continued recovery in the housing market coupled with sales related to repairs in the areas impacted by Hurricane Sandy," Home Depot CEO Frank Blake said in a statement.
The company said its results were strong across the country. New York and New Jersey were the strongest regions as people repaired homes after Superstorm Sandy, but there was also recovery in Florida, California and Arizona — the hardest hit regions during the housing downturn.
Home Depot also said Tuesday that it will buy back $17 billion of its common stock and boosted its quarterly dividend by 34 percent.
Its shares rose more than 5 percent in midday trading.
The news comes amid other signs that the economy is finding its way again. The Standard & Poor's/Case-Shiller 20-city home price index rose 6.8 percent in December, up from a 5.5 percent annual gain in November. And consumer confidence rose more than expected in February, according to the New York-based Conference Board, reversing three months of decline.
For the period ended Feb. 3, Home Depot Inc. earned $1.02 billion, or 68 cents per share. That compares with $774 million, or 50 cents per share, a year ago. Analysts polled by FactSet expected 64 cents per share.
The chain said that an extra week in the current quarter compared with last year increased its earnings by about 7 cents per share.
Revenue climbed 14 percent to $18.25 billion from $16.01 billion, beating Wall Street's estimate of $17.72 billion.
The extra week added approximately $1.2 billion to the current quarter's revenue. Home Depot estimates Superstorm Sandy added $242 million in sales during the quarter, $112 million more than sales related to Irene in the prior year.
Revenue at stores open at least a year, a key indicator of a retailer's health, increased 7 percent. In the U.S., the figure climbed 7.1 percent. The extra week is not included in these results.
This metric excludes results from stores recently opened or closed.
Purchases under $50 rose 0.3 percent in the fourth quarter, while purchases over $900 rose 9 percent, boosted by sales of generators and appliances.