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Home Depot reported Q2 earnings declined 15% to $1.59 billion, or $0.81/share, with adjusted EPS totaling $0.77, compared to analysts' average estimate of $0.72/share. Sales fell 1.8% to $22.18 billion, but still topped expectations of $22.02B. HD-EarningsChart-8-14-2007 Same-store-sales on the quarter were down 5.2%, in its first profit and revenue decline in four years. Home Depot said the housing market continues to be "challenging," and said it believes "the housing and home improvement markets will remain soft into 2008." Earnings per share were helped by a 5% reduction in the number of shares outstanding to 1.97B. Home Depot referred to its press release from last Thursday, saying the $10.325B sale price of its HD Supply unit to private equity could be reduced, which could impact its $22.5B share buyback recapitalization strategy. Home Depot reiterated full-year guidance for a 15% - 18% drop in EPS, not including the impact of the HD Supply sale and recapitalization. Home Depot's earnings call is at 9 a.m. Check for its earnings call transcript later today. Shares of Home Depot lost 1.9% to $35.24 on Monday.

Sources: Press release, Bloomberg, MarketWatch
Commentary: Is Home Depot's Share Buyback At Risk? My Question AnsweredHome Depot Falls Most In Four Years, Likely To Cut Sales Price of Supply UnitHome Depot Lowers 2007 Earnings Guidance
Stocks/ETFs to watch: HD. Competitors: LOW. ETFs: RTH, XLY

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Source: Home Depot Q2 Net Down 15%, But Beats Estimates, Reiterates Guidance