Discontinuity in Data Causes Decline in Home Depot’s (NYSE:HD) Earnings


Home Depot (NYSE:HD) is an American based company that retails home improvement and construction products and offer services related to it. The company is not only spread across the United States, but also has stores across Canada and Mexico. On Tuesday, Home Depot (NYSE:HD) declared its 3rd quarter earning prior to the opening of the market. The company declared diluted earnings per share (EPS) of $1.15 and $20.52 billion in revenues. During the same time last year the home improvement retailer had reported its earnings per share (EPS) to be $0.95 on revenue of $19.47 billion. According to Thomas Reuter’s unanimous estimates, the company’s 3rd quarter results showed earning per share (EPS) of $1.13 and 20.47 billion in revenues.

The 3rd quarter sales at all Home Depot (NYSE:HD) stores across the globe increased 5.2% on yearly basis and the 3rd quarter sales in United States increased 5.8%.

The home improvement company repeated its 2014 directions for increasing sales of around 4.8% and lifted its earnings per share (EPS) estimate from $4.52 to $4.54. Home Depot (NYSE:HD) also confirmed its plan of regaining a gross amount of $7 billion in common stock in the year 2014. The company admitted that it had been able to buy back $5.74 billion during its initial 3 quarters of the fiscal year and is hoping to regain $1.26 billion shares in the year’s upcoming 4th quarter.

Home Depot (NYSE:HD) recognized that the decline in price that the company had disclosed earlier this year was linked to its earnings per share estimate of around $34 million. The company confessed that it is completely unaware of the final poll and said that the final results might have an impact on the company’s 4th quarter results and the affects may carry on into the future quarters as well.

As per the consensus, the estimates for the 4th quarter show the earnings per share (EPS) of $0.90 on revenues of $18.7 billion. For the whole year, the earnings per share (EPS) are calculated at $4.50 on revenues of $82.67 billion. The prevailing consensus predictions for the fiscal year of 2015 show the earnings per share (EPS) at $5.23 on revenues of $86.34 billion.

The CEO of Home Depot (NYSE:HD), Craig A. Menear said that the company saw strong performance during the quarter across all of its locations. He also said that the performance was lead by the growth in transactions and the ongoing strength that was witnessed in the heart of all the stores.

In premarket trading the shares was 0.5% down, at $97.50 in a 52-week range of $27.21 to $99.36. The aiming price set by the consensus analysts was around $100.00, prior to the revelation of the results. The results show a slight difference between the estimated amount and the amount actually generated. Whether Home Depot (NYSE:HD) will be able to fill in the gap and gain the amount that is expected in the next quarter or not is something that will be keep the analysts guessing.