Home Depot Pops on Housing Recovery
Shares of the nation’s largest home improvement retailer traded to the upside on Tuesday morning following the company’s third quarter report. During the quarter, Home Depot’s (NYSE:HD) net earnings rose to $1.4 billion, or 95 cents a share, from $947 million, or 63 cents a share, a year earlier. These results came in better than analysts on the street had anticipated. Analysts, on average, looked for earnings of 90 cents per share. On the top line, revenues rose 7.4 percent to $19.5 billion, beating the analysts consensus estimates of about $19.2 billion.
Following the quarter the street speculated to the strength behind the numbers. Some analysts and traders have decided the strength came from to key business segments, both consumer and professional sales. Many homeowners saw their home prices rise dramatically over the third quarter of last year. Hence, it is logical to assume many of these consumers felt more comfortable investing in their properties. Within the professional segment, it is believed professional spending increased as a result of higher confidence within the industry. Higher spending on construction can be supported so long as home prices continue to rise.
The company successfully improved its efficiency and distribution costs during the third quarter. Alongside stronger sales and earnings, the company was able to raise its guidance for the third time in the last year. At the time of this writing, shares of Home Depot were higher by 1.87 percent to $81.10. Shares of the company are drastically higher this year, year to date shares have risen by an astounding 30 percent. Going into the rest of the week, we will likely see more analyst commentary and recommendations. Keep your ears peeled for competitor Lowe’s quarterly results tomorrow.
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