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Lowe's 2Q Profit Up 9 Percent on Higher Revenue

Associated Press
Published | Updated

CHARLOTTE, N.C. – Lowe's Cos. (LOW), the nation's second largest home improvement chain, said Monday that its second-quarter profit rose 9 percent on higher overall revenue.

The results came in ahead of Wall Street expectations, and its shares rose more than 4 percent on premarket trading.

But its sales at stores open at least a year fell. The home improvement market has been slowing amid a slump in the housing sector.

The Mooresville, N.C.-based retailer said it earned $1.02 billion, or 67 cents a share, for the three months ended Aug. 3, up from $935 million, or 60 cents a share, a year earlier.

Revenue rose to $14.17 billion from $13.39 billion a year earlier.

But same-store sales, or sales in stores open at least one year and a key measure of industry performance, fell 2.6 percent. The company had expected a same-store sales decline of 1 percent to 3 percent for the quarter.

"Although macro economic factors pressure the home improvement industry, we continue to capture market share in this challenging sales environment," Robert A. Niblock, Lowe's chairman and chief executive said in a statement.

Analysts surveyed by Thomson Financial had been looking for net income of 61 cents a share on revenue of $14.13 billion.

Lowe's shares rose $1.16, or 4.3 percent, to $28.03 in premarket trading.

Last week, rival Home Depot Inc. (HD), the nation's largest home improvement store chain, said its second-quarter income dropped 14.8 percent. Its same-store sales dropped 5.2 percent.

During the latest quarter, Lowe's opened 26 new stores including two relocations. The company currently operates 1,424 stores in 49 states, an 11.1 percent increase over last year.

For the first six months of the year, Lowe's reported earnings of $1.76 billion, or $1.15 per share, compared with $1.78 billion, or $1.13 per share, in 2006. Revenue rose to $26.34 billion from $25.31 billion a year earlier.