Improved merchandise and increased demand on account of
remodeling activities following Hurricane Sandy, led
Lowe's Companies Inc
) to post fourth-quarter 2012 earnings of 26 cents a share that
handily surpassed the Zacks Consensus Estimate of 23 cents.
However, earnings remained flat year over year.
Following healthy results, the company now expects earnings to
be $2.05 per share in fiscal 2013. The current Zacks Consensus
Estimate for fiscal 2013 is $2.08.
This Zacks Rank #2 (Buy) stock, which competes with
The Home Depot, Inc
), witnessed a 5% decline in total revenue to $11,046 million.
However, the reported revenue surpassed the Zacks Consensus
Estimate of $10,826 million. During the quarter, comparable-store
sales grew 1.9% on a consolidated basis, and it marked an equal
increase in U.S. operations.
Going forward, the company expects total sales to rise by 4%
in fiscal 2013, while comparable-store sales are expected to
Despite a 5.1% decline in cost of sales, gross profit
decreased 4.9% year over year to $3,785 million. However, gross
profit margin showed signs of improvement and increased
marginally to 34.3% during the quarter, reflecting a decline in
cost of sales as a percentage of revenues.
The company now expects earnings before interest and taxes
(EBIT) as a percentage of sales or operating margin to expand by
60 basis points year over year in fiscal 2013.
Moreover, the company plans to open 10 new stores during
fiscal 2013. As of Feb 1, 2013, the company operated 1,754
locations in the United States, Canada and Mexico.
Other Financial Aspects
Lowe's ended the quarter with cash and cash equivalents of
$541 million, long-term debt of $9,030 million, reflecting a
debt-to-capitalization ratio of 39.5%, and shareholders' equity
of $13,857 million.
During the quarter, the company repurchased 21.3 million
shares for $750 million and distributed $180 million in
dividends. For fiscal 2012, the company repurchased 146 million
shares for $4.35 billion and distributed $704 million through
Moreover, in order to enhance shareholders' return, the
company announced a new $5 billion share repurchase program
overriding the current program.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that these have the right combination of elements to
post an earnings beat this quarter:
New York & Company Inc.
with an Earnings ESP of +12.50% and a Zacks Rank #2 (Buy).
Dollar Tree Inc.
) has an Earnings ESP of +1.01% and carries a Zacks Rank #3
DOLLAR TREE INC (DLTR): Free Stock Analysis
HOME DEPOT (HD): Free Stock Analysis Report
LOWES COS (LOW): Free Stock Analysis Report
NEW YORK & CO (NWY): Free Stock Analysis
To read this article on Zacks.com click here.