Well, seems like Lowe's Companies, Ic. (NYSE: LOW) did much better than expected during the third quarter. And I was apparently too pessimistic in my earnings preview. The call was for $0.28 per share. The home-improvement retailer beat expectations by $0.05 per share, according to Thomson Reuters estimates. Hey, I tip my hat to management.

But I wouldn't buy the stock just now (unless, of course, you have a very long-term horizon, are willing to ride out the bear market, and intend on improving your cost basis through dollar-cost-averaging). My reasoning is simple: total sales increased only 1.4%, and same-store sales decreased nearly 6%. It's that bad drop in the comps that really has me worried. All retailers are suffering through lousy comps right now, and I think sales are destined to remain weak.

Yet, the market seems to be saying something else to me. Lowe's saw its shares rise over 4% on Monday, on good volume, and on a bad day for the major indexes, too. Is the market saying that all the bad news is priced in? You know, I understand the earnings game and how the market loves it when a business beats estimates, and certainly a $0.05 beat is cool, but I'm not sure that better prices are ahead for those who follow Lowe's and its stock. Consumers just won't be spending enough to justify the buying seen in Lowe's equity yesterday.

Lowe's (NYSE: LOW), a chain that sells products related to home improvement for do-it-yourselfers and competes with Home Depot (NYSE: HD), is set to report earnings for the third quarter on Monday, November 17. The expectation is for $0.28 per share. If management hits that number, which its shareholders are praying it does at the very least, then that would represent a 35% drop in per-share income. At this point, investors are becoming numb to things like 35% drops in per-share income, aren't they? Ah, the wonders of a bear market.

Lowe's beat in the previous two quarters according to AOL Finance, but all bets are currently off as far as I'm concerned. Retail is awful, consumer confidence just felt the poke of the Grim Reaper's index finger and is dying a slow death, and I'd have to assume that people haven't done much to improve their homes during the past quarter. With all the headlines talking about job losses and the like, putting up new cabinets in the kitchen is probably far down on the consumer's list of priorities. The actual numbers for the quarter won't matter so much. Even if Lowe's beats by a penny, it's the outlook Wall Street will be dissecting. And that won't be good, will it? Everyone's outlook is cautious at the very best. At the very least, management will be doing what it can in terms of preserving the margins. I'm sure there will be talk about cost-cutting and efficiencies during the conference call. Let me tell you, management is going to need a lot of efficiency initiatives going forward in this cataclysmic climate. And I hope they have their cash-flow statement working at an optimum level.

Earlier this week, Jim Cramer pondered whether the U.S. economy had reached bottom, given such recent signs as stronger-than-expected retail sales and investor interest in homebuilders. In particular, he said he's looking at next week's quarterly results from Lowe's (NYSE: LOW) and Home Depot (NYSE: HD) as a sign for the housing sector and for the potential market rally.

Lowe's is expected by analysts surveyed by Thomson Financial to report second-quarter earnings of 39 cents per share, down 18.8% from 48 cents per share in the same period in 2007, but up 28.2% from 28 cents per share in the previous quarter. The company has provided positive surprises in four of the past five quarters.

North Carolina-based Lowe's is the second-largest U.S. home improvement chain, behind rival Home Depot, and the second-largest appliance retailer after Sears (NYSE: SHLD). In the past year, the company's revenues were $48.2 billion and its net income totaled $2.8 billion. Its long-term EPS growth forecast is 12.7%, which is better than its industry average. The consensus recommendation of analysts remains to buy Lowe's.

The stock is up 9.9% since the beginning of the year, but has fallen 20.5% from a year ago. It trades at a P/E ratio of 13.38. Shares closed Friday at $24.89.

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, Black & Decker is worth a review.

The Black & Decker Corporation (NYSE: BDK) is a global manufacturer and marketer of power tools and accessories, hardware, home improvement products, and fastening systems.

In general, analysts like BDK's recent restructuring to improve productivity and operating margins. For the most part, analysts are forecasting low-single-digit sales growth for 2008 and 2009, weighed down by the housing sector's doldrums.

America's largest home improvement superstores, Lowe's Companies Inc. (NYSE: LOW) and Home Depot Inc. (NYSE: HD) are scheduled to report earnings this coming week. Here's a quick peek at them ahead of results.

Lowe's has missed earnings expectations only once in the past five quarters. When the company reported third-quarter fiscal 2008 results back in November, earnings came to 43 cents per share, beating the consensus forecast of analysts polled by Thomson Financial by two cents. For the current quarter, analysts expect only 25 cents per share, compared to 40 cents in the year-ago quarter.

The company's earnings per share growth forecast for the next three to five years is 19.1%, less than the industry average of 31.6%. The analysts' consensus recommendation is to buy Lowe's, though 10 of 21 analysts rate it a hold. Shares are up from the 52-week low of $19.94 in January, and closed Friday at $23.59.

For news on Lowe's and its rivals that could influence the earnings results, see BloggingStocks' Lowe's coverage.

With the markets in a choppy/consolidation mode (or perhaps worse), it's best to consider including a few defensive stocks in your portfolio. The Stanley Works (NYSE: SWK) is worth a review.

Stanley manufactures tools for professional, industrial, and consumer use, and has built a business model that's been successful for more than a hundred years. A security solutions unit accounts for about 20% of revenue, but the key revenue driver here is tools: hammers, screwdrivers, pliers, sockets, saws, and measuring instruments, among other products.

Stanley has endured due to the company's diversified product line, outstanding pricing framework (matching value to price), discipline regarding costs, and durability of its products. That, not surprisingly, has led to a superior brand reputation, which the company has adeptly marketed abroad: about 40% of sales are international-based. The Reuters F2007/F2008 EPS consensus estimates for SWK are $4.01 to $4.50.

Home improvement chain Lowe's Cos. (NYSE: LOW) is moving sharply higher in today's premarket following the release of strong second quarter earnings. Boosted by higher revenues, the North Carolina company reported a 9% jump in quarterly profits.

The company earnings of 67 cents per share, a nice upside surprise from the 61 cents analysts had expected. This was all the bulls needed to push the stock higher. So far this morning, shares of Lowe's are up 6.1%, looking to open up $1.63.

Not surprisingly, the company did have one weakness, and that was sales from stores open a year or more, which was directly related to the slowdown in the housing market. Analysts had factored that in already, and the actual decline was "only" 2.6%.

Welcome to the tenth installment of The Wal-Mart Weekly, a new weekly column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

Last week I looked at Wal-Mart Stores' (NYSE: WMT) store count and possible market saturation in several areas of the country where it operates. Is the retailer spreading itself too thin these days? Can it keep up growth by just adding stores or does it need to find ways to increase sales in existing stores?

Today, let's look at how home improvement mega-retailers Lowe's and The Home Depot have cut into Wal-Mart's business. These "Big-Box" home improvement retailers offer a dizzying array of merchandise to spruce up that home. There are category overlaps with quite a bit of what Wal-Mart offers, so is the world's largest retailer up to the challenge? Let's find out.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

A few months ago, I moved into a larger apartment and found that I would need to make numerous trips to the hardware store each week -- and sometimes twice on Saturdays. The list of projects I had in mind for my new pad was as long as a city block and I knew some choices needed to be made. The most important one: Should I go to Home Depot (NYSE: HD) or Lowe's (NYSE: LOW)?

I always go to Home Depot to get lumber or some screws for the toolbox, or to glance at the power tools that I always dream of finding a use for. I go to Lowe's to pick up a closet organizer or to look at the latest washer and dryers on sale. They're both big box home improvement stores, but each one has its own special place in the world.

When I first drive into the lot of the big orange beast, I always see construction crews hauling lumber and Sheetrock into their vans. I know these people didn't search online for what they needed here, mainly because the HD site only has 20% of their actual inventory online. If you want to know what's in Home Depot, you actually have to go to Home Depot. As I walk inside, I find this magical place where men can walk happily around sawdust filled floors, sans spouse, testing out power tools and talking shop with other men. Workers in bright orange aprons walk side-by-side with beeping forklifts that weave in and out of crowded isles, creating an atmosphere that would intimidate any novice do-it-yourselfer. This is the department store for DIY weekend warriors. This is home.

I certainly don't get the same feeling driving to Lowe's. Lowe's is more focused on the aesthetics of home improvement and the final product, compared to Home Depot, which I feel is more about tools and parts. I can search through the Lowe's website much easier than Home Depot's, and even place an order to pick-up whatever I need, which is always good for the novice fixer-upper. Walking into Lowe's, I see couples walking on perfectly swept floors down extra-bright, super-wide aisles. I walk past tons of appliances and machinery that call out to me: top-of-the-line refrigerators, washing machines, and lawn tractors; I walk past them in amazement. This is a place for the general public and the occasional fix-it-yourself team; and this place takes pride in targeting women in their stores -- officials directly aim for the female customer by placing shelves at the perfect height for the 5-foot-4-inch customer.

Last week, commodity and company earnings sent some seriously mixed signals.

Gold, historically a pretty good indicator of excess money flowing through the economy, took off, jumping over $20 an ounce. Gold has been in a tight trading range the past year or so, a sign that Fed policy was correct by halting rate increases. However, it is tough to read what last week's rally was all about.

Housing data, conversely, an important component of the overall economy, was simply awful. Reports from the home improvement retailers -- Home Depot (NYSE: HD) and Lowe's (NYSE: LOW) -- were exceptionally weak, with same store sales down 5% to 11% depending upon the month you wanted to look at.

However, macro data such as employment and wage growth remain good, but employment is a lagging, not a leading, indicator.

With that said, in addition to gold, a lot of other commodities took off during the week.

In the tech world, semiconductors, one of the most hypersensitive economic indicators, fundamentals have been deteriorating since November 2006 and there is little evidence this market has bottomed.

Signals are too confusing to be comfortable with the market. Most indexes have had great rallies since the fall. It is time to take some money off of the table. There is little evidence that 1st quarter earnings will be that good.

In addition, another consideration is a seasonal factor. The Fed tends to add more money to the economy in the second half of the year and slows down money supply growth in the first half of the year. This is a reason why the market's performance tends to be weakest during the April through September time period and stronger from October through March.

These mixed signals tell me to start pruning your portfolio. We are in for a bumpy ride and it will be nice to have some cash on the sideline to do some buying when market volatility and investors' fear increases.

Home Depot Inc. (NYSE:HD) today reported fourth-quarter results that were in-line with Wall Street's expectations. The bad news is that they weren't very good.

Net income fell 28 percent to $925 million, or 46 cents per share, from $1.3 billion, or 60 cents, the Atlanta-based company said in a statement. Excluding a 4-cent charge related to severance given to former Chief Executive Robert Nardelli, profit was 50 cents. Revenue rose 4 percent to $20.3 billion. Analysts expected profit of 50 cents on sales of $20.8 billion, according to Thomson Financial.

Particularly depressing for Home Depot was the 6.6 percent decline in same-store sales. Total retail sales fell 2 percent to $17.4 billion. HD Supply, which is may be spun off, was the only bright spot. Its sales soared 64 percent to $2.9 billion because of acquisitions.

"Reflecting the challenging housing market, our 2006 retail results were disappointing," said Frank Blake, chairman & CEO. "We may not be able to impact the housing market or general economic conditions, but we know that we can improve our performance relative to our overall market share. That will be a central point of emphasis for us in 2007 and beyond."

The company said it will provide details of its turnaround plan and earnings guidance for next year at its February 28 investors' meeting.

It would have been better for Home Depot to release the earnings at the same time as the investors' meeting. Wall Street shouldn't be kept waiting more than a week to hear how Blake plans to revamp Home Depot.

The Black & Decker Corporation (NYSE: BDK) announced this morning that it was lowering its fourth quarter guidance to $1.30-$1.35; consensus estimates were $1.85. This caused the stock to plummet 8.9% in trading today to $79.20 around 11:30 a.m.

The company gave a few reasons for the lowered guidance:

• Weak conditions in the United States
• Decreasing orders from key retailers
• Pressure from the housing market and weaker demand for discretionary goods going into 2007

Decreasing orders from key retailers -- are they referring to Home Depot Inc. (NYSE: HD) and Lowe's Companies, Inc. (NYSE: LOW)? -- during the holiday season is a scary sign, not only for Black & Decker, which should obviously be avoided at least until they give 2007 guidance in January, but for the home improvement industry in general. Caution required here.

Back in 2003, Heidi Baker purchased her first condo and did much of the remodeling herself. However, she quickly realized there were not many resources for her to turn to.

It got her thinking: Why not start a business to help women with home improvement? She talked to a friend (and future co-founder), Phil Breman, and they brainstormed a new concept for a television show: "Jane of All Trades."

It also attracted a veteran entrepreneur, Eden Jarrin. "I just knew that it could be something big," she said. "I saw opportunities much beyond TV and into a complete cross-media platform that combined the boom in home improvement with the expansion of online content and community."

It was excellent timing. After all, the female homeowner and home improvement market is growing quickly. For example, the number of single female homeowners is expected to grow from 17 million in 2005 to 32 million in 2010. What's more, female spending on home improvement is in excess of $70 billion.

As for BeJane, it takes a hybrid media approach; that is, the company's how-to content is in newspapers, radio and web properties. There is even branded merchandise (eg, the Multi-use Pink Toolbelt).