Lowe’s Cos., the second-largest U.S. home-improvement retailer, reported fourth-quarter profit that exceeded analysts’ estimates after warmer weather encouraged outdoor projects.
Net income in the quarter ended Feb. 3 rose 13 percent to $322 million, or 26 cents a share, from $285 million, or 21 cents, a year earlier, the Mooresville, North Carolina-based company said today in a statement. Excluding some items, profit was 29 cents a share. Analysts projected 23 cents, the average of 23 estimates in a Bloomberg survey.
Chief Executive Officer Robert Niblock has equipped employees with iPhones and added online merchandise to catch up to larger rival Home Depot Inc. Lowe’s also benefited from the fourth-warmest January on record and a drop in the unemployment rate to a three-year low last month, helping sales at stores open at least a year advance 3.4 percent in the quarter.
“Lowe’s reported a strong quarter aided in part by weather,” David Strasser, an analyst at Janney Montgomery Scott LLC in New York, wrote today in a note to clients. He recommends buying the shares and said the results show “a company making progress in its transition.”
Analysts had expected Lowe’s same-store sales to increase 1.1 percent, the average of seven estimates. Home Depot, based in Atlanta, reported last week a 5.7 percent jump in comparable-store sales in the fourth quarter.
Lowe’s fourth-quarter revenue rose 11 percent to $11.6 billion. The average estimate of 19 analysts was $11.3 billion.
Lowe’s gained 0.7 percent to $27.34 at the close in New York. The shares rose 1.2 percent last year.
Lowe’s said profit per share in the fiscal year ending Feb. 1, 2013, may be $1.75 to $1.85. Analysts estimated $1.80. The retailer said comparable-store sales may rise 1 percent to 3 percent after they were essentially unchanged in 2012.
Store closings, discontinued projects and asset impairments reduced profit in the fourth quarter by 3 cents a share. The company said last year it would close 20 stores in October and November and canceled plans for some new locations as part of efforts to boost profit from existing stores.