NEW YORK (AP) — Home Depot Inc.'s first-quarter net income rose 18 percent, thanks to the ongoing housing recovery, despite a chilly and wet spring.
Its quarterly results topped Wall Street expectations, and the world's biggest home improvement chain boosted its full-year earnings and revenue forecasts Tuesday. Shares rose nearly 2 percent in midday trading.
Home Depot, which operates 2,257 stores, and other retailers are enjoying easing pressure as the housing market slowly improves.
"While weather negatively impacted our seasonal and exterior businesses, our core interior project business remained strong throughout the quarter," said CEO Frank Blake. "This was encouraging and consistent with the views that the housing market is starting on the path to recovery."
For the three months that ended May 5, Home Depot Inc. earned $1.23 billion, or 83 cents per share. That's up from $1.04 billion, or 68 cents per share, a year earlier. Analysts predicted earnings of 76 cents per share, according to a FactSet survey.
Revenue for the Atlanta company rose 7 percent to $19.12 billion from $17.81 billion. Wall Street expected $18.62 billion.
The company has been improving its online business, and during the quarter completed its rollout of a program that lets shoppers buy online and have items shipped to a local store.
"So far, the growth we've seen from this has been ahead of our expectations, and one out of five customers who pick up an order at the store also buy some additional items while there," Blake said.
Revenue at stores open at least a year, a key gauge of a retailer's health, climbed 4.3 percent. This figure excludes results from stores recently opened or closed.
Total transactions rose 1 percent. Purchases under $50, which represent about 20 percent of U.S. revenue, were down 1.6 percent, mainly because of fewer purchases in its garden business. Purchases over $900, which also represent about 20 percent of U.S. business, rose 9.7 percent in the first quarter, helped by strength in appliances and continued improvement from the company's business with professional contractors.
The chain anticipates fiscal 2013 earnings of $3.52 per share, with revenue up about 2.8 percent. Its prior guidance was for earnings of $3.37 per share, with revenue rising about 2 percent. The revised outlook implies revenue of $76.83 billion, based on 2012's $74.75 billion.
Analysts expect full-year earnings of $3.54 per share on revenue of $76.98 billion.
S&P analyst Michael Souers raised his target price by $7 to $62 for the stock. But he reiterated his "Sell" rating.
"Despite continued expected improvement in housing, we caution that refinancing activity would likely slow should interest rates rise, hurting remodeling," he said.
Shares rose $1.63, or 2.1 percent, to $78.39 during midday trading. The stock has traded between $47.68 and $79.36 during the past 52 weeks.
Copyright 2013 The Associated Press.