WILKESBORO, N.C., Feb. 25, 2002 - Lowe's Companies Inc., the nation's second biggest home improvement retailer, said Monday its fourth quarter profit rose 55 percent, fueled largely by the eagerness of American consumers to invest more money in their homes.
The results beat Wall Street expectations and its shares rose more than 3 percent in early trading.
Net earnings totaled $218.4 million, or 28 cents a share, for the quarter that ended Feb. 1, up from $140.8 million, or 18 cents a share, a year earlier.
Lowe's said its fourth quarter sales increased 15.6 percent to $5.3 billion from $4.54 billion a year ago.
Analysts surveyed by Thomson Financial/First Call were expecting Lowe's would report earnings of 25 cents a share for the quarter.
Lowe's shares climbed on the favorable news Monday to close at $47.49, up $1.44 or just over 3 percent, on the New York Stock Exchange .
Speaking to analysts on a conference call, chairman and chief executive Robert L. Tillman said Lowe's benefited from having stores in key markets that catered to the needs of consumers.
"Americans continue to invest in their most important asset -- their homes," he said. "Americans value sense of balance in their lives, and home is a retreat from everyday pressures."
Lowe's, based in Wilkesboro and second only to Home Depot in home improvement, also benefited from the continued strength of the housing market. Mortgage rates remained below 7 percent in the quarter, which encouraged more would-be buyers to enter the market.
Also, some homeowners refinanced their mortgages and freed up cash for home improvement projects, said Tillman.
For the fiscal year, it earned $1.02 billion, or $1.30 a share, up from $809.9 million, or $1.05 a share, a year earlier. Annual sales rose to $22.1 billion from $18.8 billion in 2000.
Lowe's opened 115 new stores during the year, including 14 relocations. Seven older, smaller stores were closed. As of Feb. 1, Lowe's operated 744 stores in 42 states.
Looking ahead, Tillman said the company expects to open about 45 stores in the first quarter of 2002 and post earnings per share of 35 to 36 cents.
Analysts surveyed by Thomson Financial/First Call were expecting earnings of 34 cents a share for the first quarter.
Copyright 2002 Associated Press