Feb. 22 (Bloomberg) -- Lowe’s Cos., the second-largest U.S. home-improvement retailer, posted fourth-quarter profit that exceeded analysts’ estimates after sales at established stores fell less than the company forecast. Net income rose 27 percent to $205 million, or 14 cents a share, from $162 million, or 11 cents, a year earlier, the Mooresville, North Carolina-based company said today in a statement. Analysts projected 12 cents, the average of estimates in a Bloomberg survey.
Sales in stores open at least 13 months fell 1.6 percent in the quarter ended Jan. 29, beating Lowe’s prediction that they would decline at least 2 percent. U.S. housing starts increased 2.8 percent in January, the Commerce Department said, a sign that the housing market is stabilizing.
Earnings in the first quarter may total 27 cents to 29 cents a share, the company forecast. Analysts projected 33 cents, on average. Full-year profit will range from $1.30 to $1.42, compared with analysts’ $1.37 average estimate.
Lowe’s fell 13 cents to $23 at 7:43 a.m. New York time, before the start of regular U.S. trading. Before today, the shares had dropped 1.1 percent this year on the New York Stock Exchange.
Lowe’s said it plans to buy back as much as $5 billion in shares over the next three years under a new authorization by the board. The company spent $500 million to repurchase 21.9 million shares in the fourth quarter.
“Our fourth quarter results, including sales and earnings that exceeded our guidance, suggest the worst of the economic cycle is likely behind us,” commented Robert A. Niblock, Lowe’s chairman and CEO. “While the psychological impact of falling home prices and an uncertain employment picture continue to weigh on consumers, improving comparable store sales trends, including improvement in many bigger-ticket, project categories, provides an encouraging sign that consumers are gaining the confidence to take on more discretionary projects.
