Economic naysayers can't wish away the evidence of a building boom in the sales numbers of the market's giants... ----- ------ ------ link to the story Home Depot's 2Q Profit Up on Robust Sales The Home Depot Inc. raised its full-year earnings outlook on Tuesday after posting a 19 percent increase in net income as store and customer-service upgrades continued to buoy sales. The results sent shares of Home Depot, a component of the Dow Jones industrials, up more than 3 percent and easily surpassed Wall Street expectations. The nation's largest home-improvement store chain said it earned $1.55 billion, or 70 cents a share, in the three months ending Aug. 1, compared to a profit of $1.30 billion, or 56 cents a share, in the same period a year ago. Excluding the effect of an accounting change, Home Depot said it earned $1.57 billion, or 71 cents a share, in the quarter. Analysts surveyed by Thomson First Call were expecting earnings of 64 cents a share. Revenue in the second quarter was $19.96 billion, an 11 percent increase from the $17.99 billion recorded a year ago. The performance, a day after rival Lowe's reported an 18 percent increase in quarterly income, defied worries that rising interest rates and costly energy prices might curb Americans' home-improvement spending. "It was a very impressive performance in an environment where interest rates are rising and gas prices are rising," said Eric Bosshard, an analyst with FTN Midwest Research in Cleveland. He said the Atlanta-based company's efforts to modernize its stores in the face of growing competition, improve customer service and better train employees is "driving the Home Depot story." Chief executive Bob Nardelli said Home Depot will spend $2 billion this year on its store-modernization program, which includes technology upgrades. Home Depot also has been looking to expand beyond its traditional markets. In June, Home Depot said it plans to expand into China, which offers the company a chance to tap into a nearly $50 billion home improvement market. The company has not said how many stores it plans to open there or when it will open its first store in China. The earnings results represented the first time in the company's 25-year history that it has recorded nearly $20 billion in sales in a three-month period, Nardelli said. "The passion and entrepreneurial spirit is alive and well at The Home Depot," Nardelli said in a conference call with analysts and investors. He said the company saw growth in several key markets, including San Diego, Philadelphia and Indianapolis. The company also is seeing more customers paying for Home Depot to install products for them, raising revenue for the company's in-home services division by 27 percent, to $883 million. Home Depot raised its full-year earnings growth projections from 10 percent to 14 percent, to 14 percent to 17 percent. On the revised basis, it expects to earn $2.14 a share to $2.20 a share this year, compared to $1.88 a share last fiscal year. Analysts surveyed by Thomson First Call expect $2.16 per share. Home Depot also reiterated its previous full-year sales growth projections of 10 percent to 12 percent. That would amount to sales of $71.3 billion to $72.6 billion for the year, compared to $64.82 billion last fiscal year. Shares of Home Depot rose $1.12, or 3.3 percent, to close at $35.10 Tuesday on the New York Stock Exchange. The company, meanwhile, is working to get supplies to people affected by Hurricane Charley. Nardelli said 33 of the company's stores were in the path of the hurricane, which ravaged parts of Florida and the Southeast. Home Depot said same-store sales increased 4.8 percent in the quarter, the number of customer transactions increased 2.6 percent and the average sales ticket rose 8.2 percent to $54.73. Same-store sales are sales at stores opened at least a year and are considered the best indicator of a retailer's health. For the first six months of the year, Atlanta-based Home Depot said it earned $2.64 billion, or $1.18 a share, compared to a profit of $2.21 billion, or 96 cents a share, in the year-ago period. Six-month revenue was $37.51 billion, a 13.3 percent increase from the $33.10 billion recorded a year ago. At the end of the second quarter, Home Depot operated 1,788 stores in the United States, Canada and Mexico. It has 300,000 employees. On Monday, Home Depot's chief rival, Mooresville, N.C.-based Lowe's Cos. Inc., that it had an 18 percent jump in second-quarter income, though it missed Wall Street's estimates. Lowe's also boosted its earnings outlook based on what it called continuing strength in the nation's housing market. ----- Ooops. Looks like the doomsday pusher's sad stories are being disproven.... by facts.
*crickets chirping as doomsdayers scramble to refute Home Depot and Lowe's as "right wingnuts."* Ignoring the fact doesn't make it go away.
Mr. Iroc if George W. Bush farted would you start a thread stating he had stimulated natural gas production to benefit our economy? Just Curious, UOU
tell me again IROC it, how does Home Depot making money in the 2Q help my wife find a meaningful job ? this continues to be a jobless recovery, this isn't being a doomsday pusher, it is just the way it is right now this "recovery" is the damnest thing...some businesses seem to be doing great while others lag and through it all, the only jobs being created are service jobs that don't cut the mustard for college educated folks
Chump... unfortunately what you describe is exactly what capitalism is all about. Which system would you rather have? A communist one? Didn't think so. Meanwhile, there are plenty jobs unfilled. The issue is how you define "meaningful." Any income would help, no? Then find a position in any sector in the meantime. Part of the problem is that the college systems of the country incorrectly over train people in an area until the market is over-saturated with a particular skill set. That is not any party's fault. Or any president's. It is this "American Dream" dog-eat-dog society. And I for one think it's exactly why people get over themselves and switch careers in mid-stream. And I'm sorry if that is offensive, and I don't know about you, but I was taught in school that the economy is a "survival of the fittest" kind of thing... you adapt, or you lose out. I for one was in college to enter a certain place in the medical world (physical trainer/sports medicine), saw it was a saturated market place with several in that skill set being educated - not enough jobs for "trainers" - so I switched, fortunately, to a business degree... And have found gainful employment in office settings, using my skill set... And when the opportunity came to move to another office manager position with better pay, I did. But when the company sold, I went into deliveries for a welding supply house, then a roofing one... you have to adapt to keep income coming in now. The country is in a Boom.... Perhaps a job with a booming company along the lines her skill set could be looked in to? I don't know, and I certainly wouldn't try to suggest any of your personal business, nor expect you take anything I say as a "help." I'm sorry about the job search... but to me "meaningful" = income by any means. And then when a position opens, perhaps the ability to show an ambition to find gainful employment will be an interview asset. As for the UOU assumption made up there... Where is this about Bush? This is about dispelling the naysayers.... Either party needs to talk this up. I'm sure that both will try and say it's because of them. It's just sad that you brought up the "if Bush farted" question to distract from civil discussion.
Building boom? C'mon, IROC...everyone knows it just the government building housing for the unemployed.
I'm embarrassed to say that most of Home Depot's profit came from my pocket. I'm under the misconception that I'm one power tool away from being truly handy. This has nothing to do with George Bush.
Well actually, I totally agree. I guess my point/question all along on this is, "how/why do we lay all the blame/credit for the economy's downturns/upturns solely on any president?" But of course whichever party is NOT in office will do just that.. blame downturns... while the party in office will... credit upturns.
Exactly, so while Home Depot was up, other retail competitors suffered, thus minimizing the overall effect on the economy. It's not like the demand for 2x4's, lawnmowers, or handsaws has all of a sudden skyrocketed.
This must've been why Greenspan raised rates. Why is my freakng real estate mutual fund going to sh-t then? Iroc-it, enlighten me plz, thx.
Good times are all I hear from those in the real estate business...they are working lots of hours and making so much money...Not my cuppa tea, otherwise I'd venture to it...But, IROC it, makes a great point about not being affixed towards today's labor field...It doesn't work like that and hasn't for awhile now...The housing sector is so important and so affective, the boom in the housing sector affects so much (in a positive manner) in differing areas for complimentary services, and products...Perhaps with more depth and scope than other consumer demands... This is a major contribution towards the health of the economy...
Again, why have both my real estate mutual funds crashed and burned the last few months? (OK, not burned, but taken significant declines and not rebounded at all). I've lost thousands of dollars and would like an explanation.
Primarily b/c interest rate increases negatively affect real estate prices and demand for real estate investments.
HD is actually still down for the year. In addition, HD is only one component of the 30 stocks that make up the DJ Industrial average, which is now down about 500pts this year. Many of the 29 other stocks in that average, such as Dell, Hewlett-Packard, Intel, Pfizer, and Walmart, have had weaker earnings outlooks. So IMO, Home Depot is not a true indicator of the state of the economy. If anything, it has simply been a lucky beneficiary of the historically low interest rates that have been a boon to homebuying, home refiancing, and thus home repair. Their sales figures are a bit misleading as well because ppl aren't actually buying that much more of the products this year. HD has simply been stealing market share away from small independent home contracters by moving further into actual home installation of the products they sell. So one could argue that part of HD's great earnings report does not really reflect a growth in the economy but simply a replacement of small businesses who are now getting pushed out of the economy.
how can anyone base their assertions of a boom based solely on one company??? WTF is that??? while the economy is better than what it was the months following 9-11, it is in no freaking way "booming." i mean, can you actually say this is a BOOMING economy with a straight face??? gimme a f*cking break.
There is definite boom both in commercial building and house building where I live, in Texas, and in much of the northeast of the country at least. That's how anyone can say that. Maybe I'm blessed to live near it, and benefit from it. I'm sorry you don't see the proof where you live, but in North Texas/DFW area especially the boom is definitely on... the building are popping up all over. Ft. Worth is gaining some skyscrapers with some big corporate action, the shopping centers are cookie cutting all over the place, and the 2500 to 4500 sq. ft. homes are hoppin' like love bunnies. And this has been accelerating over the past 6 months... As for the mutual fund situation... they are never a solid investment enough to place too many eggs in their basket, are they? I have always been advised to steer clear of mutual funds. A diversified stock portfolio with a 33%-50% moderately agressive investment profile would serve you better over a course of say 10-15 years. But that's the shortest amount of time I'd expect any real "profits" from. I guess a mutual is good, if you stay fortunate in it, for some quick gains yo could cash in... but they are riskier from what I've always been told. Somebodies making a good commision off you, Sam. (Actually IO hope not, I hope it'll turn around for you. Downturns stink. ) I'd play some traditionally solid stocks, with a few moderately agressive, maybe even one or two super aggressive before I'd put too much in a mutual fund that can literally stand still or reverse over the same number of years. But that may also be just my advisor's lucky guessing at work.
