Home Depot Earnings Top Views, Sets Share Buyback

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Home Depot said Tuesday its fourth-quarter profit topped Wall Street analysts' expectations, boosted by an extra week of sales in the current quarter as well as by improvements in the U.S. housing market, and purchases made in the aftermath of super storm Sandy.

The home improvement giant also announced it would buy back as much as $17 billion of its own shares, and raise its dividend 35 percent to 39 cents from 29 cents a share. (Click here to track the market reaction to Home Depot's earnings report.)

In the latest period, Home Depot earned $1.0 billion, or 68 cents per share, up from earnings of $774 million, or 50 cents per share, in the year-ago period.

Sales rose to $18.25 billion from $16.01 billion a year ago.

Analysts had expected the company to report a profit of 64 cents on $17.70 billion in revenue, according to a consensus estimate from Thomson Reuters.

The company said the extra week of sales added about $1.2 billion to its top line, and boosted earnings by about 7 cents a share.

For fiscal year 2013, the retailer expects sales to rise 2 percent, but be up 3 percent on a same-store sales basis.

Earnings after the planned share repurchases will be up 12 percent to $3.37 a share in fiscal year 2013, the company said.

That forecast is below the $3.49 a share that analysts were projecting.

A day earlier, rival Lowe's posted earnings that topped expectations, but its full-year guidance fell short of expectations. For fiscal 2013, Lowe's said it expects to earn $2.05 a share, however, analysts were estimating the retailer would earn $2.10 a share.

Home Depot has been taking market share from Lowe's with the help of lower pricing and better customer service, according to analysts.

The industry leader has also benefited from having more centralized distribution centers and from recent efforts to shift more employees to jobs where they serve customers directly. A return to more locally targeted marketing and merchandising has also helped.

Under CEO Frank Blake, Home Depot was quicker than Lowe's to cut costs in the years after the housing collapse.

In recent quarters, the company has gotten a boost as housing markets have rebounded in regions where it has a heavy presence.

--Reuters contributed to this article.