MOORESVILLE, N.C. – Lowe's Cos. Inc. (LOW) said Monday its second-quarter profits rose 18 percent and the nation's second largest-home improvement chain boosted its third-quarter earnings outlook based on what it calls a vibrant housing market.
Even though the second-quarter results fell short of analysts' forecasts as adverse weather hurt June sales, investors seemed pleased with the news. Lowe's shares rose more than 6 percent higher in late morning trading on the New York Stock Exchange (search).
The second-largest home improvement chain behind the Home Depot Inc. (HD) earned $704 million, or 89 cents, in the three months ended July 30. That compared with $597 million, or 75 cents per share, in the year-ago period.
Analysts surveyed by Thomson First Call expected 91 cents for the second quarter.
Lowe's sales for the quarter were $10.2 billion, an increase of 17.3 percent over $8.7 billion in sales a year ago.
"Robust housing turnover, record home ownership, attractive mortgage rates and improving consumer confidence highlighted a solid performance in the second quarter where our stores delivered record earnings," said Robert L. Tillman, Lowe's chairman and chief executive officer, in a statement.
Following a solid start to the quarter, however, sales weakened in June as bad weather in parts of the country helped slow down the usual increase in home improvement projects, Lowe's President Robert A. Niblock said.
Sales rebounded in July, Niblock said.
"There's nothing we can say we did that was dramatically different that started the re-acceleration," Niblock said Monday during a conference call with industry analysts.
The company said that it expects to earn 65 cents to 66 cents in the third quarter. Analysts polled by Thomson First Call project 64 cents.
The Mooresville-based company opened 20 new stores during the quarter, including three relocations. At the end of the quarter, Lowe's operated 997 stores in 45 states.
Net earnings for the six-month period ending July 30 were up 14 percent to $1.16 billion, or $1.45 per share. That compared with $1.0 billion, or $1.27 per share in the year-ago period. Sales increased to $18.8 billion, up from $15.78 billion.
Shares were up $2.85, reaching $49.50.