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Home Depot (HD) Posts Upbeat 4Q, Yet Guides 2013 Below Street

 February 26, 2013 07:18 AM

(By Balaseshan) Home Depot Inc. (NYSE: HD) reported a 31.9 percent jump in quarterly earnings on higher sales and additional week gains. Despite upbeat results, the home improvement retailer guided fiscal 2013 below Street's view.

The world's largest home improvement retailer posted higher quarterly earnings as its business benefited from a continued recovery in the housing market coupled with sales related to repairs in the areas impacted by Hurricane Sandy.

Results of Home Depot, a Dow component, are considered by investors as a measure to gauge the ups/downs of the global economy due its significant international reach and the ongoing trends in the housing market.

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On an adjusted basis, earnings per share (EPS) jumped 34 percent to 67 cents, topping market expectations of 64 cents for the fourth quarter. Home Depot earnings have managed to beat Street view thrice in the past four quarters.

Net earnings climbed 31.9 percent to $1.021 billion for the three months ended February 3. The latest quarter results reflect a favorable adjustment to a China store closing charge of about $0.01 per share. The 14th week increased EPS by about $0.07.

Sales grew 13.9 percent to $18.25 billion, coming in above consensus estimates of a 10.50 percent increase. Excluding the 14th week, fourth quarter sales rose by 6.3 percent. Comparable store sales gained 7.0 percent, with U.S. sales up 7.1 percent.

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At the end of the fourth quarter, the company operated a total of 2,256 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.

The company said its board of directors declared a 34 percent increase in its quarterly dividend to $0.39 cents per share. The dividend is payable on March 28, to shareholders of record on the close of business on March 14. The board also authorized a $17.0 billion share repurchase program replacing its previous authorization.

Looking ahead into the fiscal 2013, the company expects earnings per share (EPS) growth after anticipated share repurchases of about 12 percent to $3.37. Wall Street analysts, on average, expect earnings of $3.49 per share.

Home Depot projects sales growth of about 2 percent, while analysts expect a 2.90 percent increase for the year. Comparable store sales growth are anticipated to be about 3 percent.

HD shares closed Monday's regular session down 2.53 percent at $63.92. The stock has been trading in the 52-week range between $46.12 and $68.15.



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