Home improvement retailer Lowe's Cos. reported Monday that a robust housing market drove second-quarter earnings higher year-over-year, but results failed to meet Wall Street expectations.
Quarterly earnings rose 18 percent to $704 million, or 89 cents per share, from $597 million, or 75 cents per share, a year ago. Analysts surveyed by Thomson First Call expected the company to post earnings of 91 cents per share in the latest quarter.
Sales increased 17.3 percent to $10.2 billion, up from $8.7 billion in the second quarter of 2003. Same-store sales, or sales at stores open at least one year, rose 5.1 percent.
"Robust housing turnover, record home ownership, attractive mortgage rates and improving consumer confidence highlighted a solid performance in the second quarter where our stores delivered record earnings," said Robert L. Tillman, Lowe's chairman and CEO.
The company said the quarter started out strongly, but sales weakened in June as bad weather in many parts of the country hurt late spring and early summer projects.
Looking ahead, Lowe's said it expects to post third-quarter earnings of 65 cents to 66 cents per share, on sales growth of about 15 percent. For the full year, the company forecasts earnings of $2.69 to $2.71 per share on sales growth of about 18 percent. Excluding an accounting change, full-year earnings should be in the range of $2.85 to $2.87 per share. Analysts expect Lowe's to post earnings per share of 64 cents and $2.71 per share for the third quarter and full year, respectively.
Shares of Lowe's closed Friday at $46.65 on the New York Stock Exchange.