Home Depot’s Turn To Top Expectations Again, But It Stays True To Its Forecast
(CTN News) – It is safe to say that Home Depot easily exceeded expectations in both profit and revenue for the third quarter. However, investors are spooked by the fact that the company continues to stick to the projections it released earlier in the year.
It is no surprise that Home Depot easily exceeded predictions for both profit and revenue in the third quarter. However, investors were left spooked by the company’s decision to stick to its earlier projections for the year.
Home Depot Inc. shares fell more than 2% before the market opened on Tuesday.
In the quarter under review, profit rose 5.1% to $4.34 billion, or $4.24 per share, for the company. An industry survey conducted by Zack Investment Research showed that per share earnings are expected to be much higher than the $4.11 projected by Wall Street analysts.
It was also reported that the Atlanta company’s quarterly revenue increased 5.6% to $38.87 billion, which exceeded the company’s expectations
For the year, however, the home improvement retailer reaffirmed its expectations for for growth sales of about 3%. This is a much lower increase than most analysts have expected. According to the company, per-share growth should be in the mid-single digit percentage range over the next few years.
The managing director of Global Data, Neil Saunders, stated that the company’s quarterly numbers are impressive when you consider the company has had two years of very strong growth. In spite of that, he continued on to say that Home Depot was not immune to a tightening of the economy.
Home Depot’s performance will continue to be buffeted by a variety of headwinds, which will continue to gather pace, Saunders wrote in his report. It seems, however, that the effect of this will be more to take the edge off the growth numbers, rather than to cause sales to drop.”
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