Home Depot Inc (HD) Fourth Quarter Results To Reflect Continued Housing Sector Growth

Photo by Ildar Sagdejev

Photo by Ildar Sagdejev

Home Depot Inc (NYSE:HD) will report its financial results for the December quarter on February 24 before the market opens. The expectation is that the results will continue to be driven by the recovery in the housing sector along with improved price appreciation of homes. The turnover in the housing sector is also likely to boost the company’s top line, as well as the bottom line.

Favorable Factors

There is nothing to suggest that the economy was struggling in the fourth quarter. On the other hand, it indicated improved sentiments about the GDP growth, which would come partly from consumer spending. During the third quarter earnings call conference, Home Depot Inc (NYSE:HD), President and CEO, Craig Menear, stated that the economy was showing improving conditions. The fact that he chose to reaffirm its sales and earnings outlook indicated confidence in achieving estimated results due to market conditions.

For some retailers, weak gasoline prices due to the global drop in oil costs since September would mean weaker comps. However, as far as consumers are concerned, it means that consumers have extra money at their disposal, which will be used for a variety of purposes, including purchase of items and home improvement.

During the conference call, Home Depot Inc (NYSE:HD)’s EVP for Merchandising, Ted Decker, indicated that its tactics were to align suppliers to bring innovative value to the market. He said that the company proposed to do this by adding 21 new Kohler SKUs to its bath and kitchen faucet line-up. The company was confident that these would bring the latest in innovation, style and exclusivity.

Earnings Expectations

On average, 27 Street analysts’ expect the company to deliver earnings of 89 cents a share and $18.7 billion revenue. This represented EPS growth expectations of nearly 22% on a 5.6% revenue uptick in the fourth quarter.

Home Depot Inc (NYSE:HD) delivered earnings of 73 cents a share and $17.7 billion revenue in the last year fourth quarter. The company’s earnings topped analysts’ expectations in two of the last four quarter while, in the other two, its earnings missed.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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