NEW YORK (TheStreet) -- Home-improvement retailer Lowe's (LOW) - Get Report fell a penny short on third-quarter earnings, while management's fiscal-year revision failed to measure up to Wall Street estimates. In response, share prices tumbled 2.9% to $49 before market open on Wednesday.

For the three months ended Nov. 1, the company recorded net income of $499 million, or 47 cents a share, a 26% year-over-year increase on last year's $396 million. Analysts surveyed by Thomson Reuters had expected net income of $503.48 million, or 48 cents a share. evenue of $13 billion, a 7.3% year-over-year increase, beat expectations by $280 million.

For the 12 months ending January, the world's second-largest home improvement chain expects earnings of $2.15 a share, 5 cents higher than previous guidance. Analysts forecast $2.19 a share for the full year. Management anticipates gross sales to grow 6%.

Lowe's results come a day after No. 1 competitor Home Depot (HD) - Get Report managed to surprise with its fourth-quarter earnings. The industry leader recorded net income of 95 cents a share, beating estimates by 6 cents, on $19.5 billion in revenue. While Home Depot managed to grow comparable-store sales by 7.4%, Lowe's pulled a slightly more moderate 6.2% increase across its locations.

The retail chains' revenue and same-store sales growth is a harbinger for the continued housing recovery. The sector bottomed out during the U.S. economic downturn.

"The home improvement industry is poised for persisting growth in the fourth quarter and further acceleration in 2014," said Lowe's CEO Robert A. Niblock in a statement. "This balanced performance resulted from our improved collaboration and execution within a strengthening home improvement market."

TheStreet Ratings team rates Lowe's Companies Inc as a Buy with a ratings score of A+. The team has this to say about its recommendation:

"We rate Lowe's Companies Inc (LOW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."