Home Depot Sets $18 Billion Buyback, Profit Beats Estimates
(Reuters) – Home Depot Inc , the world’s No.1 home improvement chain, reported a better-than-expected rise in quarterly same-store sales said it would buy back $18 billion of its shares.
Home Depot’s profit also beat market expectations as an improving job market encouraged Americans to spend more on renovations, helping to send its shares up 3 percent in premarket trading on Tuesday.
The company’s $18 billion share buyback replaces a $17 billion buyback authorized in 2013.
Home Depot’s same-store sales rose 7.9 percent in the fourth quarter ended Feb. 1, beating the average analyst estimate of 5.5 percent, according to research firm Consensus Metrix.
Comparable sales increased 8.9 percent in the United States, where Home Depot has more than 85 percent of its 2,269 stores.
U.S. homebuilders remain upbeat about market conditions, according to a survey by the National Association of Home Builders published last week.
Home Depot’s net income rose 36 percent to $1.38 billion, or $1.05 per share, in the quarter. Excluding items, the company earned $1.00 per share.
Net sales rose 8.3 percent to $19.16 billion.
Analysts on average had expected earnings of 89 cents per share on revenue of $18.7 billion, according to Thomson Reuters I/B/E/S.
Home Depot also raised its quarterly dividend to 59 cents per share from 47.
The company said it expects full-year 2015 earnings of $5.11 to $5.17 per share, after accounting for share buybacks.
Home Depot shares closed at $112.28 on Monday on the New York Stock Exchange.
(Reporting by Nandita Bose and Siddharth Cavale; Editing by Savio D’Souza)
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