The
performance of home depot is directly related to the housing industry as the
number of new housing permits and customer affordability has impacted
positively to the housing industry. To gauge the housing activity the key
matrices that are used are mortgage rates, housing market index, housing starts as well
as new and existing home sales as the stats shows existing home sales rose by
9% during first eight month of CY13 while new home sales fell by 8% over the
same period and this indicates that the growth of the Home Depot is also
dependent upon sales of existing home compared with the new ones. The other
driver of stock prices is the seasonal impact as the stats shows that it
recorded highest sales in the second quarter of its fiscal year due to higher
construction activity in the summer season. Also as the number of transaction
increases it impacted the store sales and ultimately reflects into the stock
prices of Home Depot.
Home Depot was successed to beat estimates for the third quarter
of FY13. The company also raise guidance on the basis of better operating
performance and share buyback activity. Good news HD is up nearly 2% today after beating
analysts’ estimates and raising guidance. However, the company facing the risk
of a housing slowdown and will not be able to sustain high single digit growth
in same store sales as mortgage rates rise.
Home Depot’s 6 month results for 3QFY13 beat analysts’ estimates for revenues and adjusted EPS by 1.5% and 5.8% respectively. The company announced an EPS of $0.95 for the quarter vs. estimates of $0.89. Growth in company’s comparable store sales (comps) and share repurchases both contributed towards driving up the company’s EPS. Its comps were up 7.4% with a major contribution from 8.2% growth in comps from US stores. The company repurchased $1.69bn worth of stock (1.5% of the company’s total market cap) during the quarter. The company’s management cited improvement in the housing market along with better operational performance to be the core growth drivers. If analysts are right about The Home Depot (HD), the world’s largest home
improvement retailer should post a profit of 89 cents per share on Monday, up
from the year-ago figure of 74 cents. That Home Depot earnings result is
expected to come on the heels of revenue of $19.17 billion, up from the year-ago
figure of $18.13 billion. Then again, fans and investors
of Home Depot stock can afford to be a little more confident with this particular
hardware store than they likely can with other stocks. Home Depot earnings have topped
estimates in 13 of the past 14 quarters. All of those quarters have showed
revenue growth, and all of them showed income growth. For perspective on just how reliable
and impressive HD stock is for its owners, per share income for the company has
grown every year, from 2009’s $1.57 to what will likely be a total of $3.70
this fiscal year. Revenue for Home Depot has grown from $66.17 billion in 2009
to what likely will be $77.68 billion for this year. Yes, the Home Depot earnings growth
trend is as ridiculously strong as the sales growth trend is, and yes, the
company maintaining that strong trend into 2014. For next year, the Home
Depot earnings figure should roll in at $4.37 per share, on the heels of $82.43
billion in revenue.
No comments:
Post a Comment