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Lowe's earnings: 86 cents a share vs 79 cents EPS expected

Lowe's topped analysts' estimates across the board Wednesday, as the chain capitalized on a stronger U.S. housing market to drive sales and earnings higher.

The retailer also delivered a rosy outlook for fiscal year 2017, sending shares up 8 percent in premarket trading.

Here's how the company did:

—EPS: 86 cents per share, adjusted, versus 79 cents per share expected by Thomson Reuters analysts' consensus.
—Revenue: $15.78 billion versus $15.39 billion expected by Thomson Reuters.
—Same-store sales: A 5.1 percent increase versus a 2.4 percent increase expected by FactSet.

One year ago, Lowe's earned 59 cents a share on $13.24 billion in revenue.

"This is a really good quarter from Lowe's," Oppenheimer senior equity research analyst Brian Nagel told CNBC's "Squawk Box."

An employee works in the paint department at a Lowe's store in Louisville, Kentucky.
Luke Sharrett | Bloomberg | Getty Images
An employee works in the paint department at a Lowe's store in Louisville, Kentucky.

The home improvement sector has been a rare outperformer in retail, as rising home prices have caused Americans to invest in their residences.

Lowe's sees that trend continuing in fiscal 2017, saying it expects revenue to increase roughly 5 percent, with sales at its established stores rising 3.5 percent. That should translate into earnings of $4.64 per share, the retailer said.

All of those projected metrics topped Wall Street's forecasts.

"We've entered 2017 well-positioned to capitalize on a favorable macroeconomic backdrop for home improvement by continuing to execute on our strategies to expand customer reach and develop capabilities to anticipate and support their needs," CEO Robert Niblock said in a statement.

Despite its momentum, Lowe's growth has lagged that of competitor Home Depot, whose in-store execution and relationships with professional contractors have helped boost its sales and profits.

That gap continued in the fourth quarter, with Lowe's comparable sales gain coming in just shy of Home Depot's 5.8 percent growth. However, it also narrowed.

Nagel said several factors may have contributed to the narrower rift between the two.

For one, some of the changes Lowe's laid out at its investor meeting in December may be taking hold. Those changes were focused on boosting the chain's productivity. The company recently laid off roughly 1 percent of its workforce in an attempt to streamline its operations and improve customer service in stores and online.

For another, Lowe's product mix and store locations skew more toward markets that are dependent on weather. Its stores are concentrated in the Midwest and Southeast.

"For the first time in a while in this quarter we actually had normalish weather, so Lowe's may have benefited more from that than Home Depot," Nagel said.

The company repurchased $551 million of stock under its share repurchase program and paid $306 million in dividends in the fourth quarter.

CNBC's Katie Little contributed to this report