Stock market »

Home Depot, an earnings beat & raised guidance

Share on StockTwits
Published on
Home Depot, an earnings beat & raised guidance

Shares of the nation’s largest home improvement retailer rose by 3% in early trading on Tuesday as the company reported a better than anticipated second quarter. On the back of the housing recovery, the company was able to beat on both the top and bottom lines. Home Depot (NYSE:HD) watched its earnings rise greatly to $1.8 billion, or $1.24 per share. On a year over year basis earnings per share rose by more than 22% from the $1.01 earned in the second quarter of last year. Revenue for the company climbed more than 9% to $22.52 billion, from $20.57 billion. Analysts consensus estimates had predicted the company to generate only $1.21 in earnings per share on revenue of $21.79 billion.

Over the last few weeks shares of Home Depot have come under pressure as rising interest rates have caused some to fear the housing recovery. In a matter of months interest rates on mortgages have jumped from their historic lows. The interest rate on the 30 year mortgage is up nearly 100 basis points to 4.5%. The higher rates rise, the less demand we can expect to see as the costs of owning a house rise. However, confidence is getting a boost from the very limited supply of homes for sale. Unfortunately there isn’t much to look at in terms of supply. U.S. home prices surged 11.9% in June from June of 2012. In past quarters IT spending was made a priority through $450 million in capital expenditures, hopefully management offers guidance to the benefits of this spending.

Shares of the company are off the 52-week highs around $81 per share registered earlier in the year. In premarket trading shares rose to $77.50, roughly 4.5% off yet another 52-week high. As the street has some time to digest the quarter we will hopefully have more clarity on the success of some of the company’s new initiatives.

Share on StockTwits

What others are reading on Finances

Sorry. No data so far.

Iron FX 1.11156/1.11128 2.8
XM Markets 1.09948/1.09928 2
FxPro 1.10184/1.10171 1.3
FXCM 1.13943/1.13912 3.1