It has become difficult to find many names floating in this mess the past few months, but Home Depot (HD) is certainly one of the better ones. This morning it hit a 52 week high on earnings as the nascent home building recovery combines with home refurbishing / restoration to create a tailwind. While the company will also benefit from Sandy, this will only offset the year ago gains from Irene so net net, probably going to be a wash.
- Home Depot Inc.'s net income rose slightly in the third-quarter, as glimmers of a housing market recovery and storm-preparation added to sales and offset costs related to closing stores in China. Results beat expectations and the company also raised its forecast for the year.
- In the last week of the third quarter, the company garnered a $70 million lift from sales of batteries and flashlights, generators and extension cords. Ultimately the company said it expects Sandy will generate about as much revenue as last year's Hurricane Irene, which garnered $360 million in sales off of $16 billion in hurricane damage. Sandy has caused $20 billion in damage.
- "Our third-quarter results were better than we expected and reflected, in part, what we believe is the start of the path toward the healing of the housing market," he said in a statement. In a call with analysts, he added that he sees the housing market becoming "an assist to our growth rather than an anchor."
- Customer transactions over $900, about 20 percent of sales, rose 4.3 percent during the quarter, driven by purchases of appliances, flooring and kitchens.
- For the period ended Oct. 28, Home Depot Inc. reported net income of $947 million, or 63 cents per share. That's up from $934 billion, or 60 cents per share, a year earlier. Excluding a charge for closing some stores in China, earnings were 74 cents per share. That topped the 70 cents per share that analysts surveyed by FactSet predicted.
- Revenue rose more than 4 percent to $18.13 billion. Wall Street expected $17.92 billion.
- For the year, Home Depot now expects net income of $3.03 excluding the costs of closing stores in China, reflecting share repurchases. It previously forecast $2.95 per share.
- It expects anticipates revenue will climb about 5.2 percent. Based on 2011's revenue of $70.4 billion, this implies $74.06 billion. Home Depot's prior forecast was for a 4.6 percent increase, which implied revenue of $73.63 billion. Analysts expect earnings of $2.99 per share on revenue of $73.68 billion.
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund's holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog