Home Depot Falls Short of Estimates

Home Depot (HD Quote), the world's biggest seller of home-improvement goods and a component of the Dow Jones Industrial Average, said its fourth-quarter earnings declined 27.5% from the prior year, while sales edged ahead.

The Atlanta-based company, dealing with the downturn in the housing market, said Tuesday that it earned $671 million, or 40 cents a share, in the quarter, compared with $925 million and 46 cents a share a year earlier. Sales for the fourth quarter totaled $17.7 billion, a 1.5% increase from last year.

Both the top and bottom lines in the just-completed quarter fell short of estimates. Analysts surveyed by Thomson Financial were looking for a profit of 43 cents and sales of $18 billion.

Shares of Home Depot were losing 1% in premarket trading.

Revenue would have been worse by comparison, but the most recent quarter had 14 weeks, one more than the previous fiscal year. Excluding the additional week, sales fell 4.7%.

Same-store sales for the quarter were down 8.3%. The added week didn't affect comparable-store sales, Home Depot said.

For the full year, Home Depot's earnings slid to $4.4 billion from $5.8 billion the year before. Sales dropped 2.1% to $77.3 billion, and comp sales were 6.7% lower.

"This was a difficult year financially, but I believe the progress we made on our key priorities set the foundation for the long-term health of our company," said Frank Blake, chairman and CEO, in a statement. "We see the home improvement market in 2008 as challenging, but we are going to continue to focus on our five priorities and build on the progress we made in 2007."

For the current fiscal year, Home Depot expects total sales to fall 4% to 5% with a decline in same-store sales in the mid- to high-single-digit range.

On Monday, competitor Lowe's (LOW Quote) also said its quarterly profits trailed last year.