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Home Depot Gets Execution

It posts solid earnings and reiterates 2005 guidance.
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Updated from 7:01 a.m. EDT

First-quarter earnings jumped 16% from a year ago at

Home Depot


, beating estimates. The company said its stores were ready for the spotty spring weather that crimped rival



first quarter.

Home Depot earned $1.2 billion, or 57 cents a share, in the quarter, compared with $1.1 billion, or 49 cents a share, last year. Sales rose 8% from a year ago to $19 billion on a 2.1% gain in same-store sales. Analysts had been forecasting earnings of 55 cents a share on sales of $19.3 billion.

"The stores were well-prepared for spring and as the weather breaks across the country, we are positioned to take care of our customers," Home Depot said. Specifically, the company said its share of the appliance market rose by 1.8 percentage points in the period.

The latest quarter included a charge of $106 million related to a decision eventually to close 15 Expo Design Center stores.

Home Depot reiterated previous guidance for per-share earnings growth of 10% to 14% and sales growth of 9% to 12% in 2005.

Shares of the Atlanta-based chain rose $1.32, or 3.5%, to $38.69 Tuesday.

The average amount spent per-visit by each customer in the first quarter rose 5.7% from a year ago to $58.25, the company said. Sales in its services business rose 16% from a year ago, reflecting particular strength in roofing, kitchen, windows and carpet installation.

Weighted average weekly sales per store fell 2.3% from a year ago to $757,000, while the company's overall square footage rose 9.1% in the quarter.

On Monday, Lowe's said first-quarter earnings rose 31% from a year ago to $590 million, or 74 cents a share, missing estimates by 2 cents a share. Shares of both Lowe's and Home Depot rose Monday as investors chalked up the miss to bad weather.