Home Depot raised its full-year outlook on Tuesday as the retailer benefited from a recent uptick in the U.S. housing market and analysts expect a sales boost from super storm Sandy in the current quarter.
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.
Excluding a charge for closing seven stores in China, Home Depot said it had earned 74 cents per share. Analysts had been expecting 70 cents a share, according to Thomson Reuters I/B/E/S.
Third-quarter revenue also beat estimates coming in at $18.1 billion compared to estimates of $17.9 billion. Sales at stores open at least a year increased 4.2 percent worldwide, including a 4.3 percent rise in the U.S.
"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," Frank Blake, chairman & CEO of the company said in a statement.
After the earnings announcement, the company's shares edged higher n trading. (Click here to get the latest quotes for Home Depot.)
The retail chain also raised its full-year earnings forecast to $3.03 per share on an adjusted basis. Analysts had expected $2.97, according to a poll by Reuters I/B/E/S. Its prior forecast called for sales to rise 4.6 percent, with earnings of $2.95 per share.
The company said it will buy an additional $700 million of its shares in the fourth quarter.
Brian S. Sozzi, chief equities analyst at NBG Productions, said he was "encouraged by the stronger tone on the housing market by CEO Frank Blake," even as the company tried to talk down future performance by saying Home Depot's fortunes were tied to U.S. gross domestic product rather than improvements in the housing market.
Sozzi estimated that super storm Sandy positively impacting Home Depot's fourth quarter bottom line by 4 cents a share.
—Reuters contributed to this article.