Lehman Cuts Home Depot 2005 Profit Outlook

Atlanta, GA, November 10–Lehman Brothers lowered its fiscal 2005 profit estimate for Home Depot, citing exposure to higher interest rates.

The brokerage firm lowered its profit estimate Home Depot to $2.55 a share from $2.57 a share for the year ending in January 2006. For rival Lowe’s, Lehman expects 2005 profit of $3.35 a share.

Home Depot and Lowe’s report third-quarter earnings next week. Lehman expects Home Depot to post profit of 56 cents a share, up from 50 cents a year earlier, with a 9 percent rise in sales and a 3 percent rise in sales at stores open at least a year.

For Lowe’s, Lehman expects third-quarter profit of 66 cents, up from 56 cents a year ago. Total sales are expected to be up 15 percent as same-store sales rise 3 percent.

Analysts on average expect third-quarter profit of 56 cents a share for Home Depot and 65 cents a share for Lowe’s, according to Reuters Estimates.

For fiscal 2005, analysts expect per-share earnings of $2.52 for Home Depot and $3.34 for Lowe’s.