eased investors' concerns after
weak earnings report.
Mind you, Lowe's wasn't such a tough act to follow, and Home Depot's better-than-expected second-quarter profit and raised guidance hardly mean all is well. Nonetheless, investors sent shares of the company climbing 4% to $27.19 before the opening bell, after shares fell 4% on Monday on fears of
They Just Don't Get Lowe's!
During the quarter, Home Depot's profit slipped 7% to $1.12 billion, or 66 cents a share, compared with $1.2 billion, or 71 cents, in the year-ago period.
Excluding charges related to shuttering its Expo business, the company actually earned 67 cents a share, beating Wall Street's expectations of 59 cents. Results also included about $50 million in tax benefits related to a favorable foreign tax settlement.
Revenue declined 9% to $19.07 billion from $21 billion, while total same-store sales slid 8.5%.
Home Depot's superiority over Lowe's is mainly due to its regional differences -- Northeast and California improved, while Southeast deteriorated -- favoring Home Depot over Lowe's, J.P. Morgan analyst Christopher Horvers wrote in a note on Tuesday.
But "concerns about the housing market, rising unemployment and softness in the overall economy continue to pressure consumers," Chairman and CEO of Home Depot Frank Blake said in a statement.
And like Lowe's, Home Depot has taken to cutting costs, refocusing inventory and scaling back expansion.
On Monday, Lowe's said it is cutting the number of new store openings planned in 2010.
Home Depot raised its full-year forecast. It now expects earnings to be flat to up to 7%. It previously forecast a 7% dip.
-- Reported by Jeanine Poggi in New York.
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