Home Depot sees 4Q profit growth on strong housing market
NEW YORK (AP) -- The Home Depot Inc. on Tuesday reported a boost in sales and profit during the fourth quarter, as rising home prices and low mortgage rates continued lifting a healthy housing market. The home improvement retailer also announced that it was raising its dividend.
Shares climbed nearly 2 percent before the market open on Tuesday.
The Atlanta-based home-improvement retailer reported an 18.6 percent jump in quarterly profit to $1.74 billion, or $1.44 per share. Revenue rose 5.8 percent to $22.2 billion.
Both measures topped Wall Street estimates, with analysts surveyed by Zacks Investment Research expecting $1.33 per share in profit on $21.81 billion in revenue.
Home Depot benefited from a boost in customer visits and higher ticket sales, or customers spending more per visit. Same-store sales, a key measure for retailers, rose 5.8 percent. This figure excludes results from stores recently opened or closed.
More Americans signed contracts to buy homes in December, according to The National Association of Realtors in its seasonally adjusted pending home sales index, which rose 1.6 percent to 107.3. Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.
For the full year, Home Depot earned just under $8 billion, or $6.45 per share, on revenue of $94.6 billion.
Looking ahead, the chain expects sales growth of about 4.6 percent and earnings of $7.13 per share for the new fiscal year. Analysts surveyed by FactSet are calling for earnings of $7.16 per share.
Home Depot's board approved a 29 percent increase in its quarterly dividend to 89 cents per share. The company also authorized a $15 billion stock buyback program, replacing its previous authorization.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on HD at https://www.zacks.com/ap/HD
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