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Home Depot 4Q results top Street, OKs $17B buyback

FILE - In Tuesday Aug. 14 2012 file phoaperswalks toward Home Depot Nashville Tenn.  Home Depot’s fiscal fourth-quarter net

FILE - In a Tuesday, Aug. 14, 2012, file photo, aperson walks toward a Home Depot in Nashville, Tenn. Home Depot’s fiscal fourth-quarter net income surged 32 percent, the home improvement retailer said Tuesday Feb. 26, 2013. (AP Photo/Mark Humphrey, File)

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ATLANTA — Home Depot Inc., the largest U.S. home improvement retailer, said Tuesday its fiscal fourth-quarter net income surged 32 percent, beating expectations, helped by strong U.S. sales and the cleanup related to Superstorm Sandy.

The news follows smaller rival Lowe’s Cos. results Monday, which also beat expectations, and is the latest sign that Americans are feeling more comfortable spending money on their homes as the housing market slowly recovers.

“We ended the year with a strong performance as our business benefited from a continued recovery in the housing market coupled with sales related to repairs in the areas impacted by Hurricane Sandy,” said CEO Frank Blake in a statement.

Home Depot shares rose 2 percent in premarket trading.

The nation’s biggest home improvement retailer also said Tuesday that it will buy back $17 billion of its common stock and boosted its quarterly dividend by 34 percent.

For the period ended Feb. 3, Home Depot Inc. earned $1.02 billion, or 68 cents per share. That compares with $774 million, or 50 cents per share, a year ago. Analysts polled by FactSet expected 64 cents per share.

The chain said that an extra week in the current quarter compared with last year increased its earnings by about 7 cents per share.

Revenue climbed 14 percent to $18.25 billion from $16.01 billion, beating Wall Street’s estimate of $17.72 billion.

The extra week added approximately $1.2 billion to the current quarter’s revenue.

Revenue at stores open at least a year, a key indicator of a retailer’s health, increased 7 percent. In the U.S., the figure climbed 7.1 percent. The extra week is not included in these results.

This metric excludes results from stores recently opened or closed.

On Monday, rival Lowe’s Cos. reported fourth-quarter earnings that beat analysts’ estimates, with the company crediting its performance to cleanup efforts after Sandy and its new pricing strategy.

Home Depot reported full-year net income rose 17 percent to $4.54 billion, or $3 per share, from $3.88 billion, or $2.47 per share, in the previous year. Annual revenue increased 6 percent to $74.75 billion from $70.4 billion.

Revenue at stores open at least a year rose 4.6 percent, with U.S. results up 4.9 percent.

For fiscal 2013, the Atlanta company anticipates earnings of $3.37 per share adjusted for share repurchases. Revenue is expected to climb about 2 percent. Based on 2012’s revenue, this implies $76.21 billion.

Wall Street forecasts earnings of $3.50 per share on revenue of $76.24 billion.

Even though the guidance is below analysts’ expectations, NBG Productions analyst Brian Sozzi said the company is typically cautious on its outlook.

“The guidance is about right for the usually conservative Home Depot team,” Sozzi said in a client note.

Home Depot said that its $17 billion buyback replaces a prior authorization. The company has repurchased about 1 billion shares through Feb. 3. It plans to complete $17 billion in buybacks by the end of fiscal 2015.

The 34 percent increase to Home Depot’s quarterly dividend puts it at 39 cents per share. The dividend will be paid on March 28 to shareholders of record on March 14.

Home Depot had 2,256 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico at the end of the fourth quarter.

Shares rose $1.64, or 2.6 percent, to $65.56 in premarket trading. Its shares have traded in a 52-week range of $46.12 to $68.15.



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