Lowe's 3Q profit sinks 44 percent on charges

[November 14, 2011]  MOORESVILLE, N.C. (AP) -- Lowe's Cos.' third-quarter net income sank 44 percent, weighed down by charges tied to store closings and discontinued projects.

The nation's second-largest home improvement retailer earned $225 million, or 18 cents per share, in the three months that ended Oct. 28. That compares with net income of $404 million, or 29 cents per share, in last year's quarter.

Revenue climbed 2 percent to $11.9 billion.

The Mooresville, N.C., company said it recorded charges that reduced pre-tax earnings by $336 million, or 17 cents per share. Lowe's said last month it would close 20 underperforming stores in 15 states and cut nearly 2,000 jobs to focus on its more profitable locations.

Analysts surveyed by FactSet expected, on average, earnings of 33 cents per share on revenue of $11.7 billion.

Lowe's operates more than 1,700 stores in the United States, Canada and Mexico. Sales at stores open at least a year climbed less than 1 percent. This is an important metric of a retailer's health because it measures results at established stores rather than newly opened ones.

Company Chairman and CEO Robert A. Niblock said in a statement the company's performance was "not at the level we expect relative to the market."

Lowe's expects earnings per share of 20 cents to 23 cents in the fourth quarter, with revenue at stores open at least a year coming in flat or rising only 1 percent. Analysts expect, on average, earnings of 23 cents per share.

For the company's full fiscal year, which ends in early February, it expects earnings of $1.37 to $1.40 per share, including charges of about 20 cents per share tied to store closings and discontinued projects.

Analysts typically exclude one-time items from their estimates, and they expect full-year earnings of $1.59 per share from Lowe's.

[Associated Press]

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