Home Depot 2Q profit rises; cuts revenue outlook

[August 17, 2010]  NEW YORK (AP) -- Modest sales increases helped boost Home Depot Inc.'s second-quarter net income 7 percent.

The largest home-improvement retailer also trimmed its revenue forecast Tuesday but raised its earnings forecast to account for share repurchases.

Rival Lowe's Cos. cut revenue guidance a day earlier as shoppers remain cautious in the uncertain economy. Home sales have declined recently after getting a boost early in the year from tax credits, which expired at the end of April. Home buyers tend to spend on items such as new appliances or paint soon after moving in.

Quarterly net income rose to $1.19 billion, or 72 cents per share, from $1.12 billion, or 66 cents per share last year. Analysts polled by Thomson Reuters, on average, expected 71 cents per share.

Revenue rose 2 percent to $19.41 billion from $19.07 billion last year. Analysts predicted $19.59 billion.

Revenue at stores open at least one year rose 1.7 percent worldwide and 1 percent in the U.S. It was the third consecutive quarter of gains for the key measure worldwide and the second consecutive quarter in the U.S.

Revenue at stores open at least a year is a key indicator of a retailer's performance because it excludes growth at stores that open or close during the year.

Home Depot trimmed its revenue outlook to a 2.6 percent increase, from a 3.5 percent rise. That implies revenue of $67.9 billion. Analysts expect revenue of $68.21 billion.

It now expects net income of $1.90, up from prior guidance of $1.88 per share. Analysts expect $1.89 per share.

Home Depot operates 2,244 retail stores in the U.S., Canada, Mexico and China.

[Associated Press; By MAE ANDERSON]

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