Home Depot earnings miss; data breach costs still uncertain

Cramer: Home Depot great quarter

Home Depot reported adjusted earnings that missed estimates by a penny a share on Thursday, and said it was still trying to determine the total cost of a recent consumer data breach.

Shares for the company fell in premarket trading immediately following the announcement. (Get the latest quote on Home Depot here.)

Earnings for America's largest home improvement company increased to $1.15 a share from 95 cents a share in the year-earlier period. Home Depot's quarterly revenue rose to $20.5 billion from $19.5 billion.

Excluding both the $100 million gain on the sale of its stake in HD Supply, and $28 million in expenses in the quarter related to a recent consumer data breach, the company posted adjusted earnings of $1.12 a share.

Same-store sales increased 5.2 percent in the quarter, while comparable-store sales in the U.S. rose 5.8 percent.

Analysts had expected the home improvement giant to report adjusted earnings of $1.13 per share on revenue of $20.5 billion, according to consensus estimates on Thomson Reuters. Same-store sales were expected to grow 5 percent, based on an average of analyst estimates on Consensus Metrix.

Home Depot said pretax expenses related to the breach totaled $28 million in the quarter, and estimated breach-related costs could total $34 million. It also said costs related to the breach could have an adverse affect on fourth-quarter results.

Home Depot reaffirmed its fiscal 2014 forecast of earnings of $4.54 a share, with sales expected to grow about 4.8 percent for the year.

While wire services were widely quoting the $1.15 a share headline number for EPS comparisons, analysts including Stifel Nicolaus, Evercore ISI, Piper Jaffray, Canaccord Genuity, and Wedbush have been citing the $1.12 adjusted earnings number.

"HD reported Q3 operating EPS of $1.12, excluding a net benefit of $0.03 as the sale of a portion of its HD Supply investment ($100M pre-tax) offset charges related to the data breach ($28M pre-tax)," Canaccord Genuity wrote in a research note. "This was $0.01 above our estimate, and it fell short of the consensus forecast by the same amount."

The retailer said on Sept. 18 that on about 56 million payment cards between April and September. It said earlier this month that about 53 million email addresses were also stolen in the attack.

The company said costs related to its data breach may include liabilities to payment card networks for reimbursements of credit card fraud and card reissuance costs; liabilities from current and future civil litigation, governmental investigations and enforcement proceedings and other potential costs.

The retailer is facing at least 44 civil lawsuits in the United States and Canada as a result of the breach.

CNBC's Hailey Lee and wires contributed to this report.

CORRECTION: This story was updated to show that Home Depot reported earnings excluding items of $1.12 a share, missing analysts' estimates of $1.13 a share.