Home Depot announced its quarterly earnings report beating stock market forecast

Home Depot Inc(HD :NYSE), reported today the earnings report for the fourth quarter of year 2016, and the results were better than expected. This is good news, and it is reflected in pre-market trading hours, where the stock gains almost 1.5%. What were the actual numbers versus the analysts estimates? The earnings per share for 4th quarter 2016 were $1.44, while the expectation was $1.34 per share, an increase of almost 7.46%.

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The revenue was also better than expected. For the last quarter of year 2016, Home Depot had revenues of $22.21 Billion, while the expectation was $21.8 Billion, an increase of 1.88%.

Home Depot management is optimistic on earnings results

The management of the company commented as follows. "Our focus on providing localized and innovative product selection, improving the interconnected customer experience, and driving productivity resulted in record sales and net earnings for 2016," Craig Menear, chairman, CEO and president of Home Depot, said in a statement.

It is important to see how this particular stock will react to this positive earnings announcement, as the housing sector is a very important sector about the overall health of U.S. economy. In an environment of rising Interest Rates, as the Fed is expected to raise interest rates later in 2017, consumers will have to adjust their personal finances. Some factors that could have a significant effect on housing market is also the climate conditions, and if consumers will continue to spend more on both buying new houses or deciding to make any necessary changes, practical or just for psychological reasons.

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For 2017, Home Depot expects both revenue and comparable sales to rise 4.6 percent, an estimate that is considered to be a conservative one. But it is almost better for the publicly traded companies to appear more conservative in their guidance and forecasts, rather than being too optimistic and miss analysts forecasts later on. Another crucial factor is the value of U.S. Dollar. A stronger dollar can make imported goods much cheaper for consumers.

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