Home Depot posts 26.8 percent profit fall

Source: Exec Digital USA

Date :11/13/2007 11:51:58 AM

Home Depot Inc. reported a 26.8 percent drop in third-quarter profits Tuesday, as the deteriorating US housing market cut into sales.

The largest US home improvement store chain predicted a decline of as much as eleven percent in earnings per share from continuing operations compared with last year because of the persistent "softness in the housing market."

Home Depot said it earned $1.09 billion, or 60 cents a share, for the three months ending October. 28, compared with a profit of $1.49 billion, or 73 cents a share, for the same period a year ago.

The results matched Wall Street expectations, who were expecting earnings of 60 cents a share.

However, revenue in the quarter was below analysts’ expectations of $19.39 billion, dropping 3.5 percent to $18.96 billion, compared with $19.65 billion the same period a year ago.

Buy-back

The company said its $22.5 billion stock buyback plan would not be completed this year due to volatility in the credit markets and the challenging housing and home improvement markets.

"We are facing a tough environment as housing indicators continue to deteriorate," said Frank Blake, chairman and CEO. "Our financial performance in the third quarter reflects these tough conditions. But we are making significant improvements in our business and we will continue to invest thoughtfully for the long-term health of the company."

For the first nine months of the year, Home Depot said it earned $3.72 billion, or $1.94 a share, compared with a profit of $4.84 billion, or $2.32 a share, a 23 percent drop.

Nine-month revenue fell 3.1 percent to $59.7 billion, compared with $61.62 billion recorded in the same period a year ago.

November 13, 2007