Earnings Preview: Lowe's

Lowe's Companies (LOW) is expected to report Q2 earnings before the market open on Monday, November 16 with a conference call scheduled for 9 am ET.

Guidance

Analysts are looking for a profit of 24c on revenue of $11.28B. The consensus range is 22c-27c for EPS, and revenue of $11.11B-$11.6B, according to First Call.

Analyst Views

In August, the home improvement retailer forecast Q3 EPS 21c-25c and total sales down 2%-5%. The company also guided FY09 EPS $1.13-$1.21 vs. First Call consensus of $1.20, on total sales down approximately 3%. On September 22, Lowe's reiterated prior FY09 earnings and sales guidance. Chairman and CEO Robert A. Niblock said that the economic environment continues to be challenging, but the company is striving to be more efficient.

In addition, the company said it will scale back on store openings until the economy and housing market improve. Niblock said "consumers are being deliberate" and that homeowners still intend to improve their homes. CFO Robert Hull said he expects sales to increase 3%-4% a year on average over the next five years, and average net earnings will increase 15%-16% annually.

JP Morgan analyst Christopher Horvers expects the slowdown in store openings will add up to about $600M in free cash flow.