Aug. 18 (Bloomberg) -- Lowe's Cos., the second-largest home- improvement retailer, said profit fell for the fourth straight quarter and forecast earnings that trail some analysts' estimates as the U.S. housing slump pressures consumer spending.

Third-quarter profit will be 27 cents to 31 cents a share, Lowe's said today in a statement. Analysts surveyed by Bloomberg estimated 33 cents.

Second-quarter net income dropped 7.9 percent to $938 million, or 64 cents a share, Mooresville, North Carolina-based Lowe's said. Profit exceeded analysts' estimates by 8 cents.

Chief Executive Officer Robert Niblock said Lowe's still sees ``weakness'' in bigger-ticket items. Consumers are grappling with higher gasoline expenses and home prices that fell 18 percent on average from their July 2006 peak, according to the S&P/Case-Shiller index of 20 metropolitan areas.

``Energy prices, hopefully, are in the rearview mirror, but housing is less certain,'' Jeff Malcom, a portfolio manager at Horan Capital Management, which owns Lowe's shares, said in an Aug. 14 interview. ``No one knows when that's going to bottom. I can only hope we're getting near the end here.''

Sales rose 2.4 percent to $14.5 billion as consumers spent tax-rebate checks, Lowe's said.

Lowe's rose 69 cents, or 2.9 percent, to $24.50 in New York Stock Exchange composite trading Aug. 15. The shares gained 8.3 percent this year before today after two consecutive annual declines. That betters the 2.2 percent increase in 2008 by Home Depot Inc., the biggest home-improvement chain.

Analysts' Estimates

Twenty-two analysts surveyed by Bloomberg estimated average second-quarter profit of 56 cents a share for Lowe's. Seventeen estimated sales of $14.2 billion. Profit a year earlier was $1.02 billion, or 67 cents.

Full-year profit may be as much as $1.56 a share, higher than the $1.55 Lowe's previously forecast. Analysts estimated $1.50.

Stores open at least 13 months fell 5.3 percent, less than some analysts estimated. Laura Champine, an analyst with Morgan Keegan & Co., predicted an 8 percent drop, while Colin McGranahan at Sanford C. Bernstein & Co. projected estimated a 7 percent decline.

Home Depot, which reports financial results tomorrow, may say that profit dropped for the eighth straight quarter, according to analysts' estimates.

Existing U.S. home sales fell to a 10-year low in the second quarter, and the median price for a single-family house dropped 7.6 percent, the Chicago-based National Association of Realtors said Aug. 14. A third of all sales were foreclosures or ``short sales,'' in which lenders take a loss on a property.

Housing Slump

Stricter lending rules, rising borrowing costs, falling property values and record foreclosures may further depress home sales and cause builders to keep retrenching into 2009. Purchases of existing houses trigger home-improvement spending as owners prepare for a sale and buyers paint or remodel after moving in.

The median price of an existing single-family home dropped 1.8 percent in 2007, the first decline since records began four decades ago and probably the first since the 1930s, the Realtors group has said.

Consumers have seen some recent relief at the pump. Regular gasoline, averaged nationwide, fell 0.7 percent to $3.771 a gallon, AAA, the nation's biggest motoring group, said Aug. 15 on its Web site. Prices reached a record $4.114 a gallon on July 17.

Eleven analysts who follow Lowe's suggest buying the stock, while nine say ``hold'' and three recommend selling it, according to data compiled by Bloomberg.

To contact the reporter on this story: Mark Clothier in Atlanta at mclothier@bloomberg.net

Last Updated: August 18, 2008 07:41 EDT