Home Depot Inc. said Tuesday a tight lid on expenses helped the largest U.S. home-improvement retailer's third-quarter net income rise 21 percent, despite a lackluster 1 percent revenue increase as home owners continue to hold back on bigger renovation projects.
The company trimmed its revenue guidance for the year but raised its expectations for earnings.
Net income rose to $834 million, or 51 cents per share, from $689 million, or 41 cents per share. That is better than the 48 cents per share analysts expected, according to a poll by Thomson Reuters.
Revenue edged up 1 percent to $16.6 billion from $16.36 billion. Analysts expected $16.59 billion. Revenue in stores open at least one year rose 1.4 percent.
It is the fourth consecutive quarter that figure was positive. It is considered a key indicator of a retailer's performance because it excludes growth at stores that open or close during the year.
"As the business stabilizes, we continue to improve our operational performance," said CEO Frank Blake in a statement.
Home Depot Inc. is trimming its guidance for revenue growth in the year to 2.2 percent from 2.6 percent. That implies revenue of $67.64 billion, still ahead of the $67.55 billion analysts expect.
But Home Depot, based in Atlanta, raised its earnings guidance to $1.94 per share from $1.90 per share. Analysts expect $1.90 per share.
On Monday, smaller rival Lowe's Cos. similarly reported its net income rose 19 percent as revenue rose 2 percent to $11.59 billion. Home owners aren't renovating as much due to fears about jobs and the economy.
"We believe this was a solid quarter from Home Depot" as it battled with a slowdown in revenue, said Wall Street Strategies analyst Brian Sozzi. "The quarter depicted a company that is more efficient than in years past, and one that is prepared to operate effectively in a slow growth environment."
Home Depot operates 2,244 stores worldwide with 300,000 employees.