Nov. 17 (Bloomberg) -- Lowe's Cos., the second-largest U.S. home-improvement retailer, and Target Corp. posted third-quarter profit that fell less than analysts estimated after the companies reduced spending.

Lowe's forecast full-year earnings today that exceed some analysts' estimates. Target, the second-biggest U.S. discount chain, said it would suspend its share-buyback program and cut capital spending by $1 billion to conserve cash.

Shoppers concerned about their jobs and deteriorating housing values have stopped buying non-necessities and postponed larger home-improvement projects. With sales slumping, Lowe's, Target and other retailers have responded by curbing store openings in an effort to maintain profit margins.

``The news isn't as bad as people had thought, and needless to say, we haven't heard anything positive out of retail for the past three or four weeks,'' David Heupel, a portfolio manager at Thrivent Financial for Lutherans, said in a Bloomberg Television interview. Heupel helps oversee $60 billion in assets, including Lowe's shares.

Earnings for the year that ends Jan. 30 may decline to $1.46 to $1.54 a share, less than the $1.48 to $1.56 it projected in September, Lowe's said in a statement. Analysts surveyed by Bloomberg estimated $1.51.

Third-quarter net income slid 24 percent to $488 million, or 33 cents a share, from $643 million, or 43 cents, a year earlier, Mooresville, North Carolina-based Lowe's said. Sales for the three months through Oct. 31 rose 1.4 percent to $11.7 billion from $11.6 billion. Analysts surveyed by Bloomberg estimated profit of 28 cents.

Lowe's Rises

Lowe's climbed 76 cents, or 4.2 percent, to $18.99 at 4:12 p.m. in New York Stock Exchange composite trading. The shares have dropped 16 percent this year, while Home Depot Inc., which reports financial results tomorrow, has retreated 26 percent.

``Nothing in terms of consumers cutting back, not turning over homes and not investing in their homes is new to this industry,'' David Schick, an analyst with Stifel Nicolaus & Co., said in an interview. ``This is very much more of the same.''

The unemployment rate jumped to 6.5 percent in October, the highest level since 1994. Employers cut more than a half million workers from payrolls in the past two months. Citigroup Inc., the fourth-biggest bank by market value, said today it plans to eliminate 50,000 jobs, or 14 percent of its workforce.

After dropping at a 3.1 percent pace in the third quarter, U.S. consumer spending will fall 2.9 percent this quarter and 1.3 percent in the first three months of 2009, according to the a Bloomberg survey of economists. Spending, which accounts for more than two-thirds of the economy, has never decreased for three consecutive quarters in the postwar era.

`External Pressures'

``We expect continued, broad-based external pressures on our industry, as rising unemployment, falling home prices, tight credit and volatile equity markets continue to erode consumer confidence and impact sales,'' Lowe's Chief Executive Officer Robert Niblock said in a statement.

Target, based in Minneapolis, said net income decreased 24 percent to $369 million, or 49 cents a share, in the quarter ended Nov. 1 from $483 million, or 56 cents, a year earlier. Profit beat analysts' estimates by 1 cent.

Revenue, including credit-card income, rose 1.9 percent to $15.1 billion. Target's sales at stores open at least a year dropped 3.3 percent in the quarter, compared with a 2.7 percent gain at Wal-Mart Stores Inc.'s U.S. discount stores.

``Right now, the consumer is very hesitant,'' Chief Executive Officer Gregg Steinhafel said on a conference call with analysts and investors. ``They're very stressed.''

Target Forecast

If sales at stores open at least a year decline in the ``mid-single digits,'' Target may earn between 90 cents and $1 a share in the current quarter, Chief Financial Officer Douglas Scovanner said. Nineteen analysts surveyed by Bloomberg estimated profit of $1.22.

Profit from its credit card unit fell 83 percent to $35 million because of ``a decline in overall portfolio performance'' along with lower interest rates and the sale of almost half of the loans to JPMorgan Chase & Co. earlier this year, Target said.

Target fell $1.35, or 4 percent, to $31.60. The shares have declined 37 percent this year, compared with a 9 percent increase at Wal-Mart.

To contact the reporter on this story: Mark Clothier in Atlanta at mclothier@bloomberg.net; Lauren Coleman-Lochner in New York at llochner@bloomberg.net.

Last Updated: November 17, 2008 16:17 EST