By JUSTIN BACHMAN, AP Business Writer
ATLANTA, Feb. 26, 2002 (AP) - Mild winter weather and consumers' torrid spending on their homes helped The Home Depot report a 53 percent jump in fourth-quarter profit Tuesday.
The world's largest home improvement retailer said net income was $710 million, or 30 cents per share, up from $465 million, or 20 cents per share, in the same period of 2000.
Analysts surveyed by Thomson Financial/First Call had expected Home Depot to earn 28 cents per share.
Sales rose 29 percent to $13.5 billion, helped by a 14th week in the fourth-quarter, which ended this month. The seven extra days added $880 million in sales and boosted per-share earnings by 3 cents, the Atlanta-based company said.
For the full year, net income was a record $3 billion, or $1.29 per share, up 15 percent from $2.6 billion, or $1.10 a share, in the 2000 fiscal year.
Revenue rose to $53.6 billion versus $45.7 billion a year ago, although sales at stores open at least a year were flat. Home Depot said customer transactions topped 1 billion for the first time in the 2001 fiscal year.
"In the face of the daunting events of Sept. 11, the 250,000 associates of The Home Depot delivered on our promise of increased performance," said Robert Nardelli, Home Depot's chairman, president and chief executive. "We said throughout the year we would stay on strategy and we did."
Looking ahead, the company said it will meet analysts' expectation of 32 cents per share profit in the first quarter.
Nardelli affirmed the company's plan to increase sales 15 percent to 18 percent through 2004, with earnings growing 18 percent to 20 percent as managers wring further savings from the operation.
Shares of Home Depot, one of the 30 Dow industrial stocks, fell more than 2 percent in morning trading, but recovered some ground later. The shares closed at $51.51 a share, down 56 cents a share in trading Tuesday on the New York Stock Exchange.
Nardelli said the results reflect "a growing ability at Home Depot to perform well in a variety of economic climates."
The company centralized its merchandise buying during the quarter, which it expects to further reduce costs, and successfully reduced its inventory. Home Depot also reduced its long-term debt and ended the fiscal year with $2.5 billion cash.
"Most every financial metric you could look at showed solid progress," said Steve Roorda, an analyst with American Express Financial Advisers in Minneapolis, who raised his 2002 earnings forecast on the company by 6 cents to $1.58. "The balance sheet was just outstanding."
In a nod to the Enron scandal, Home Depot's chief financial officer, Carol Tome, told analysts on a conference call that Home Depot uses off-balance sheet transactions only to finance about 20 percent of the company's real estate deals.
Enron's collapse began when investors learned about the company's use of such transactions to stash debt and boost reported profits.
Home Depot opened 204 stores in fiscal 2000, including 43 in the fourth quarter. There are 1,333 Home Depot stores.
Copyright 2002 Associated Press