Housing

A Bright Light From Home Depot (HD)

95129cThe first reaction a lot of investors would have to Home Depot’s (HD) results is that they are bad. Very bad. The earnings beat Wall St. forecasts, but the firm’s comments about the future were not what shareholders wanted to hear.

The home building supply company reported reported fiscal 2008 third quarter net earnings of $756 million, or $.45 per diluted share, compared with $1.1 billion, or $.60 per diluted share, in the same period last year.

Sales for the third quarter totaled $17.8 billion, a 6.2% decrease from last year’s period. Comparable store sales fell 8.3%.

For the rest of the year, HD said that fiscal 2008 sales could be down as much as 8%. The firm blamed the housing market and soft economy.

Stopping to reflect on the housing market and lack of available consumer credit, the figures are remarkably good. With housing prices off 20% or more in many regions and access to home equity lines and credit card capital tightened, the consumer should be doing almost no home improvement work.

The numbers from Home Depot indicate that either the company is remarkably well-run and nearly perfect at pricing its products, or it shows that consumers still have a little gas left in the tank, especially when it comes to their houses. If you can afford something, you might as well keep it in good shape, probably to the exclusion of spending money elsewhere.

Douglas A. McIntyre

Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE

Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply
clicking here
you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.


Click here
to match with up to 3 financial pros who would be excited to help you make financial decisions.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.