Home Depot Tops Estimates, Surges on Earnings

Home Depot

is riding high on Tuesday on word of a successful fourth quarter. The Atlanta-based home improvement chain posted an EPS of $0.68 per share during the fourth quarter of fiscal year 2012, topping the $0.50 per share it reported in Q4 FY 2011. It also beat analysts' expectations of $0.64 per share for the fourth quarter. Revenue closed at $18.2 billion for the quarter, up 13.9 percent year-over-year. This figure also topped Wall Street expectations by nearly three percent. The strong fourth quarter was due to “continued recovery in the housing market coupled with sales related to repairs in the areas impacted by Hurricane Sandy”, according to chairman and CEO Frank Blake. For the year, EPS closed at $3, topping the company's 2011 performance of $2.47 per share. However, this figure fell slightly short of analysts hopes of $3.05. Full-year revenue finished at $74.8 billion, topping the firm's 2011 performance by 6.2 percent and analysts' expectations by around one percent.

Comparable store sales finished up seven percent in the fourth quarter. Just counting US stores, this figure rose 7.1 percent. For the year, comparable store sales finished up 4.6 percent. In the US alone, this figure rose 4.9 percent.

Home Depot will increase its quarterly dividend by $0.10 to $0.39 per share. This marks the 104th consecutive quarter the firm has paid a cash dividend. The company has also boosted its share repurchase program. It intends to buy back $17 billion worth of shares by the end of 2015.

Home Depot expects sales to grow approximately two percent in 2013. If this pans out, the firm will finish at around $76.3 billion - right about where analysts think it will ($76.37 billion). However, EPS is expected to come in below the mark. While Wall Street expects an EPS of $3.49, Home Depot plans to finish at $3.37.

Despite its weak guidance, Home Depot's successful fourth quarter and FY 2012 have given it a boost in the market on Tuesday. After hovering in the high $60s for about a month, Home Depot dropped into the low $60's on Monday, closing below $64. However, that was short lived, as the stock is now above $67.50. Home Depot is up approximately six percent on Tuesday.