FILE - In this Feb 21, 2012, file photo, a customer shops at Lowe's in New York. Lowe's said Monday, Nov. 19, 2012, its third-quarter net income surged 76 percent, helped by fewer charges and higher revenue. Its shares rose 5 percent in early premarket trading Monday. (AP Photo/Mark Lennihan, File)
NEW YORK — Lowe’s Cos.’ said Monday that its third-quarter net income surged 76 percent, helped by lower costs and higher revenue, as the company’s efforts to revamp its merchandise and prices appeared to be gaining traction.
Its adjusted earnings without charges and its revenue both beat Wall Street forecasts. Its shares rose more than 4 percent in premarket trading Monday.
Lowe’s has been retooling its pricing strategy, and last summer returned to offering permanent low prices on many items across the store, instead of offering fleeting discounts. But the changes have been slow to catch on, and last quarter Lowe’s said it could take until the middle of next year to reap the benefits of the strategy.
“We are keenly focused on improving our core business,” said CEO Robert A. Niblock. “Our level of execution is improving and we delivered solid results in the third quarter.”
The results are also the latest indication that home-improvement retailers and other housing-market related companies are benefiting from the beginning of a rebound in the housing market, with home prices and home sales growth both improving. Last week rival Home Depot Inc. reported slightly higher third-quarter net income and the company raised its full-year forecast.
Home Depot also benefited from a surge in sales late in the quarter from Superstorm Sandy preparations. Lowe’s did not point to any benefit from the storm in its earnings release.
Lowe’s earned $396 million, or 35 cents per share, for the three months ended Nov. 2. That compares with $225 million, or 18 cents per share, a year ago.
The current quarter includes charges that lowered earnings by 5 cents per share. In the prior-year period, charges reduced earnings by 18 cents per share.
The adjusted earnings of 40 cents per share beat the 36 cents per share that analysts polled by FactSet predicted.
Revenue rose 2 percent to $12.07 billion from $11.85 billion. That also beat Wall Street’s estimate of $11.93 billion.
Shares of Lowe’s gained $1.46, or 4.6 percent, to $33.44 in premarket trading an hour before the opening. Its shares peaked for the past year at $33.63 on Nov. 2 and traded as low as $22.39 last November.
Revenue at stores open at least a year, a key gauge of a retailer’s health, increased 1.8 percent. At its U.S. stores, the metric climbed by the same percentage rate. This figure excludes results from stores recently opened or closed.
For fiscal 2012, Lowe’s still expected earnings of about $1.64 per share and revenue to be approximately the same as 2011’s $50.21 billion. Analysts forecast earnings of $1.66 per share on revenue of $50.1 billion.
Lowe’s Cos., which is based in Mooresville, N.C., has 1,750 stores in the U.S., Canada and Mexico.