“Home Depot Inc. (HD), the largest U.S. home-improvement retailer, posted first-quarter profit that topped analysts’ estimates and raised its forecast for earnings this year as the housing rebound boosts renovation spending.
Net income in the quarter ended May 5 rose 18 percent to $1.23 billion, or 83 cents a share, from $1.04 billion, or 68 cents, a year earlier, the Atlanta-based company said today in a statement. Analysts projected 76 cents, the average of 25 estimates in a Bloomberg survey.
Home Depot is benefiting from rising U.S. home prices that are giving homeowners the confidence to start projects and spend more. Revenue rose 7.4 percent to $19.1 billion, topping analysts’ $18.6 billion estimate, as the average customer purchase increased 5 percent to $57.24.
Spending rose on “consumers’ confidence to invest in higher ticket projects,” John Tomlinson, an analyst at ITG Investment Research in New York, said today in an e-mail. His company doesn’t rate shares.
Profit this year will be $3.52 a share, up from a previous estimate of $3.37, the company said today. The guidance includes the effect of share repurchases the company already has made and plans to make this year. Analysts estimated $3.54, on average.
Residential real-estate prices rose in February by the most since May 2006, with the S&P/Case-Shiller (SPCS20) index of house values in 20 cities up 9.3 percent from a year ago.
Home Depot rose 3.8 percent to $79.68 at 7:26 a.m. in New York. The shares advanced 24 percent this year through yesterday, compared with a 17 percent gain by the Standard & Poor’s 500 Index.
