UPDATE 4-Home Depot view up as housing heals; Sandy lift looms
* Earnings of 74 cents a share beat 70-cent Wall Street view
Sales rise nearly 5 percent, exceed analysts' estimates
* Company raises full-year sales and profit forecasts
* Shares rise nearly 4 percent
By Martinne Geller
Nov 13 (Reuters) - Home Depot Inc raised its full-year outlook on Tuesday, even before considering any future sales lift from superstorm Sandy, as the retailer benefited from a recent uptick in the U.S. housing market.
The nascent recovery in housing has encouraged professional contractors to buy more in recent months. Home Depot, the world's largest home improvement chain, has also gained from its own efforts to improve distribution, cut costs and localize marketing and merchandising.
Shares of Home Depot, which also beat analysts' quarterly earnings estimates, were up 3.8 percent at $63.49 in midday trading.
``Our third-quarter results were better than we expected and reflected, in part, what we believe is the start of the path toward the healing of the housing market,'' said Home Depot Chief Executive Officer Frank Blake.
The housing market is becoming ``an assist to growth, rather than an anchor,'' he added.
The company said it had rung up $70 million in third-quarter sales to consumers who stocked up on flashlights, batteries, generators and extension cords before Sandy slammed into New Jersey on Oct. 29, the day after the quarter ended. Home Depot expects a bigger sales boost ahead because of rebuilding efforts, but could not pinpoint its magnitude or timing.
Home Depot raised its full-year sales growth forecast to 5.2 percent from 4.6 percent.
The company said it expected earnings of $3.03 a share, excluding an 11-cent charge for closing stores in China. Its prior full-year forecast, given before news of the China closures, called for a profit of $2.95 per share.
The new forecast does not include any benefit to fourth-quarter sales from Sandy.
Home Depot derived about $360 million in incremental sales from Hurricane Irene last year, and it forecast ``at least'' the same amount from Sandy. The company noted, however, that Irene had caused about $16 billion in property damage, compared with estimates of closer to $20 billion from Sandy.
Chief Financial Officer Carol Tome said sales so far in November were ``quite good,'' with strength in the southern and western parts of the country, which the storm did not affect.
The company's outlook reflects plans to buy back $700 million in additional shares this quarter, which would bring the total value of repurchases for the year to $4 billion.
The forecast also implies fourth-quarter earnings of 62 cents per share, according to Janney Capital Markets analyst David Strasser. Analysts on average were expecting 61 cents, according to Thomson Reuters I/B/E/S.
Net earnings rose to $947 million, or 63 cents per share, in the third quarter from $934 million, or 60 cents per share, a year earlier.
Excluding a charge for closing seven stores in China, Home Depot said earnings were 74 cents per share. On that basis, analysts were expecting 70 cents.
Sales rose nearly 5 percent to $18.13 billion, topping analysts' estimates of $17.93 billion.
Sales at stores open at least a year increased 4.2 percent globally, including a 4.3 percent rise in the United States.
Edward Jones analyst Robin Diedrich was expecting same-store sales growth of just above 3 percent.
``Things are going pretty well for them, with sales remaining strong,'' said Diedrich, who has a ``hold'' rating on the shares due to their valuation. ``The stock has done extremely well and trades at quite a premium to the rest of retail.''
Home Depot has been taking market share from rival Lowe's Cos Inc with the help of better pricing and customer service, analysts have said. Lowe's, which has lagged Home Depot in same-store sales for 13 straight quarters, plans to report its results next week.