Home Depot Inc., the largest U.S. home-improvement chain, posted fourth-quarter profit that topped analysts' estimates as a rebound in housing continued to spur spending on renovations.
Net income in the three months ended Feb. 2 fell 0.8 percent to $1.01 billion, or 73 cents a share, from $1.02 billion, or 68 cents, a year earlier, the Atlanta-based company said today in a statement. The average of 25 analysts' estimates compiled by Bloomberg was 71 cents. The chain's profit hasn't trailed estimates for 24 straight quarters, dating back to mid-2008.
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U.S. homeowners, buoyed by about two years of price gains, have increased spending on remodeling kitchens and bathrooms. That helped Home Depot more than double its initial forecast for a 2 percent increase in 2013 sales. Revenue rose 5.4 percent to $78.8 billion last year.
"The housing market is in the early innings of a recovery," Robin Diedrich, an analyst with Edward Jones & Co. in Des Peres, Missouri, said in an interview before the results were released. As long as Home Depot continues to increase sales, its profit margins will keep improving because it has done a good job lowering costs in the past few years, said Diedrich, who recommends holding Home Depot shares.
The company also raised its quarterly dividend 21 percent to 47 cents a share.
Home Depot rose 0.2 percent to $77.87 yesterday in New York. The shares gained 19 percent in the 12 months through yesterday. That compares with a 25 percent advance for Lowe's Cos. and a 22 percent increase for the Standard & Poor's 500 Index.