Home Depot Stock Up On Increased Earnings OutlookBy: Zach Walton - August 14, 2012
Home Depot stock is something that I would probably invest in. Emergency repairs and home decoration are always going to be in vogue and Home Depot will always get a chunk of those sales. The company seems to agree and has raised their annual outlook to reflect a better than expected second quarter.
Reuters is reporting that Home Depot beat the expectations of the guys and gals on Wall Street by implementing stricter cost controls. That cost control helped them raise their net earnings to $1.53 billion, or $1.01 a share. Sales also rose 1.7 percent to $20.57 billion with operating expenses lowered by 2.7 percent to $4.46 billion.
The lowered operating expenses has been integral to the success of Home Depot. They were able to achieve this through improved distribution and localized marketing. They were also able to see more success this quarter because people are now out buying more home improvement goods. Analysts are skeptical on if they’ll be able to keep up this momentum throughout the year, but only time will tell at this point.
Home Depot also attributes their success to marketing cheaper home decor and repair items to customers. It’s hard to convince people, especially in this weak economy, to spend money on items like cabinets, appliances, and other vanity items. Home Depot stores have been marketing items like faucets and paint to draw in customers.
The company expects their sales to rise 4.6 percent in this fiscal year. They expect the increased sales to bump their share price up by $2.95. The company was trading at $52.82 at close last night with a premarket value of $53.55 this morning.