Home Depot Posts 31 Percent Drop In Q3 Earnings

November 18, 2008 4:11 p.m. EST

Atlanta, GA (AHN) - Home Depot Inc. announced Tuesday its third quarter earnings fell 31 percent as consumers scaled back on big-ticket purchases. The company also cut its full-year earnings outlook.

The home improvement company posted third quarter earnings of $756 million or 45 cents a share, down from $1.09 billion or 60 cents a share in the same period a year earlier.

Revenue fell to $17.78 billion, down 6 percent from$18.96 billion last year. Same-store sales added to the weakness, falling 8.3 percent in the third quarter.

However, the results were better than analyst expectations. According to Thomson Reuters, average estimates called for earnings of 38 cents a share on revenue of $17.74 billion.

The Home Depot report comes just a day after main rival Lowe's posted an earnings decline that was slightly smaller than analysts expected.

Total customer transactions fell 3 percent in the third quarter and the average value of customer purchases declined 3 percent to $55.86.

"You all obviously know that this is a difficult environment," said Chief Executive Frank Blake, according to the Associated Press. "The view we had at the start of the quarter, that we might be nearing the bottom, ...gave way to the financial crisis in September and beyond."

Looking forward, Home Depot now expects full-year sales to fall roughly 8 percent with earnings off by as much as 24 percent.

Shares of Home Depot traded slightly higher to $20.35 in Tuesday afternoon action.