Home Depot Q4 Profit Climbs; To Buy Back Shares; Ups Dividend 26%

(RTTNews) - Home improvement retailer Home Depot Inc.'s (HD) fourth-quarter fiscal 2014 net earnings improved to $1.38 billion, or $1.05 per share, from $1.01 billion, or $0.73 per share, last year. On average, 27 analysts polled by Thomson Reuters expected earnings of $0.89 per share for the quarter. Analysts' estimates typically exclude one-time items.

Fourth-quarter fiscal 2014 results reflect a pretax gain on sale of $111 million, or $0.05 per share, related to the sale of a portion of the company's equity ownership in HD Supply Holdings, Inc. Adjusting for the gain on sale, earnings per share were $1.00 for the fourth quarter of fiscal 2014, up 37.0 percent year-on-year.

The firm reported sales of $19.2 billion for the fourth quarter of fiscal 2014, up 8.3 percent from $17.7 billion in the fourth quarter of fiscal 2013. Analysts estimated $18.70 billion in sales for the quarter. Comparable-store sales for the quarter were positive 7.9 percent, and comp sales for U.S. stores were positive 8.9 percent.

Considering the significant strengthening of the U.S. dollar, the company provided a range of sales, comp sales and earnings-per-share growth to reflect the difference between 2014 average exchange rates and current exchange rates. If currency exchange rates remain where they are today, this would cause a negative impact to fiscal 2015 net sales growth of about $1 billion, as well as a negative impact on earnings per share of some $0.06 per share. The low-end of the firm's sales and earnings-per-share growth forecast reflects this currency impact.

Looking ahead, Home Depot expects sales growth of nearly 3.5 to 4.7 percent, with earnings-per-share growth after anticipated share repurchases of about 8.5 percent to 10 percent, or $5.11 to $5.17. Analyst project annual earnings of $5.23 per share.

In addition, the board declared a 26 percent increase in its quarterly dividend to $0.59 cents per share. Also, the board authorized an $18.0 billion share repurchase program, replacing its earlier authorization.