Lowe's (LOW) kicked off the week's earnings reports by posting third-quarter earnings of 24 cents per share, matching the consensus estimate. Revenue checked in at $11.4 billion, which -- while 3% lower than a year ago -- was better than the expected revenue of $11.28 billion. LOW's same-store sales dropped 7.5%.
Looking ahead, Lowe's forecast fourth-quarter earnings between nine and 13 cents per share and full-year earnings between $1.16 and $1.20 per share. Both of those forecast ranges surround the expected 10 cents per share and $1.20 per share, respectively. Lowe's also noted that it seems that some of the home markets feeling the biggest crunch in the economic crisis are stabilizing. Nevertheless, the home-improvement firm was negatively hit as customers were putting off larger purchases thanks to the economic situation.
Technically, LOW is in a slump of its own -- but it is trying to overtake its 20-month moving average. The problem is that if the shares overtake this trendline they still have to contend with their slumping 50-month moving average. The good news is that the equity is riding along support from its 10-, 20-, and 50-week moving averages.
If the stock manages to mount a rally, watch out for resistance at the $23.50 level. The shares have retreated from this level twice in the past 12 months and could very well slink away from this level again. If you want to try and make a bargain play on LOW, watch this level. It may be best to see if the stock can topple overhead resistance, or get out of your position at the first sign of any weakness.
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