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Home Depot Improves EPS View After Buyback

The retailer now sees a 7% to 9% earnings decline, compared with its prior 12% to 15% forecast.
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Home Depot (HD) boosted its 2007 earnings forecast to reflect its big share buyback.

The Atlanta-based home-improvement retailer said Monday that it now expects fiscal-year earnings to decline 7% to 9%, compared with its previous projection for a 12% to 15% drop. The declines come as the company has been hit by a slumping U.S. housing market and loss of market share.

Home Depot gave the new forecast in conjunction with the completion of its repurchase of 14.6% of its outstanding stock. The company bought back 289.3 million shares at $37 a share, for a total cost of $10.7 billion.

With completion of the tender offer, Home Depot now has about 1.69 billion shares outstanding.

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The buyback is part of a $22.5 billion recapitalization plan that Home Depot set after the sale of its supply unit. That sale to a trio of

private-equity firms hit snags as the debt markets seized up last month, but it eventually closed after Home Depot agreed to

cut the sale price by 18%.

"We are pleased to successfully complete the tender offer, which brings us almost halfway to fulfilling our $22.5 billion recapitalization plan," said Frank Blake, chairman and CEO. "We continue to evaluate financial market conditions and will execute the rest of the plan as soon as practicable."

Shares of Home Depot recently were up 17 cents, or 0.5%, to $34.38.