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While the markets may have rallied recently, there's been little improvement in housing, credit, or consumers' pullback on discretionary spending. That's not good news for home improvement giants Lowe's Companies Inc. (NYSE: LOW) and Home Depot Inc. (NYSE: HD), which are both scheduled to report first-quarter results this week. And the expectations of analysts surveyed by Thomson Reuters bear out that sense that these companies aren't out of the woods yet.
Lowe's is scheduled to discuss its first-quarter results tomorrow, May 18, in a conference call at 9:00 AM ET with CEO Robert A. Niblock, president Larry D. Stone, and CFO Robert F. Hull, Jr. You can catch the live webcast of the call on the company's website, or in the U.S. and Canada listen in by dialing 1-888-817-4020.
For the quarter that saw a new corporate governance initiative and a quarterly dividend from Lowe's, analysts expect the North Carolina-based retailer to report a profit of $0.25 per share, compared to a $0.41 cents per share profit in the same period of the previous year. Revenue for the quarter is expected to have fallen 3.2% to $11.6 billion. Lowe's earnings have beat expectations in recent quarters, but missed by a penny per share in the fourth quarter.
Analysts, on average, expect Lowe's long-term EPS growth rate to be 10.7%, which is better than the retail industry average. Lowe's forward P/E ratio estimate is 16.0, and the consensus recommendation of analysts is to buy LOW. The share price had fallen 11.0% in the past month to $18.45, recently dropping below the 100-day moving average.
Home Depot is scheduled to discuss its first-quarter results Tuesday, May 19, in a conference call at 9:00 AM ET. Visit the company's website to catch the live webcast of the call.
For the quarter in which Home Depot acquired land for a new distribution center in Kansas and declared a quarterly dividend, analysts are looking for the Atlanta-based retailer to report a profit of $0.29 per share, compared to a $0.41 cents per share a year ago. Revenue is expected to have fallen 11.4% to $15.9 billion. Home Depot earnings have topped estimates in the past four quarters, by as much as ten cents per share.
The long-term EPS growth rate is expected to be only 9.0%, but that's still better than the retail industry average. The forward P/E ratio estimate is 18.0, and the consensus recommendation of analysts is to buy HD. Home Depot shares are 6.0% higher than at the beginning of the year, but at $24.40 they are still 16.2% lower than a year ago.
Will results from these two companies harm the rally? We'll see this week. But BloggingStocks contributor Sheldon Liber believes that Lowe's and Home Depot should be on any investor's watch list.
See BloggingStocks' Lowe's coverage and Home Depot coverage for more information.
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