Home Depot’s Net Income Rises 14%, Beats Estimates

Home Depot Inc. said Tuesday that its fiscal second-quarter profit climbed 14%, beating analysts’ estimates, as new products boosted sales. The company raised its earnings forecast for the year.

Net income at the world’s largest home-improvement retailer jumped to $1.77 billion, or 82 cents a share, from $1.55 billion, or 70 cents, a year earlier. Sales in the period ended July 31 rose 12% to $22.3 billion, the Atlanta-based company said.

The average purchase increased 5.1% as Home Depot offered new, more profitable items such as $949 Hampton Bay patio sets, $899 Ducane gas grills and Ralph Lauren Metallic paints. Chief Executive Robert Nardelli also acquired Williams Bros. Lumber Co. and National Waterworks Holdings Inc., helping sales in the professional supply business gain more than 10%.

Home Depot, with about 1,940 stores in the U.S., is entering new businesses to keep pace with the faster sales growth at No. 2 Lowe’s Cos., which is still expanding in major U.S. markets such as Chicago.

Home Depot was expected to earn 79 cents a share, the average estimate of analysts surveyed by Thomson Financial.

The company increased its forecast for full-year net income to a range of $2.58 to $2.62 a share from about $2.49 to $2.53.

Home Depot shares fell 94 cents to $40.67 after Wal-Mart Stores Inc.’s earnings disappointed Wall Street and dragged down shares of other retailers.

Home Depot’s sales have grown an average of 11% the last three years. Revenue for Lowe’s, which has about 1,125 stores, gained an average of 19% over the same period.