Housing-Related Industries: Steady Downward Trend - Housing Tracker

Housing-Related Industries

Slump Hurts Home Depot's Bottom Line. “Home Depot Inc. (HD) reported a 66% drop in fiscal first-quarter profit… HD earned $356 million, or $0.21/share, in the quarter ending May 4, compared with a profit of $1.05 billion, or $0.53/share, in FQ1’08. Excluding a one-time charge, Home Depot said it earned $697M, or $0.41/share… Analysts were expecting earnings of $0.37/share excluding one-time items. HD said revenue in the quarter fell 3.4%, to $17.91B, compared with $18.55B recorded a year earlier. Sales at stores open at least a year fell 6.5% in FQ1.”. (Chicago Tribune, May 21st)

5 Stocks Under $10. “Builders FirstSource (BLDR) -- $7.48. Warburg Pincus paid $23/share for this industry supplier two years ago… Today, [it’s] at a third of [that]. Yes, it's bad. First-quarter revenue clocked in 34% lower. The company swung to a loss from a profit in a housing industry suffering through two years of deterioration…. However, Builders FirstSource has been gaining market share through the decline. Whether it's through weaker rivals buckling or savvy acquisitions, the company is positioning itself nicely for the eventual recovery. It may not happen for another year or two, but the upside will be substantial when it materializes.” (Motley Fool, May 19th)

GE Confirms Plans To Exit Appliance Business. “General Electric Co (GE) confirmed on Friday it may sell or spin off its century-old appliances unit, saying the business was too focused on the U.S. The appliance arm, which employs about 13,000 people worldwide, is the area of GE hardest hit by the two-year U.S. housing slump, as the company sold a lot of its dishwashers and refrigerators to home builders. The Louisville-based business… generated $7.2 billion in revenue last year. [Analysts] estimated the appliances business could sell for $4B-$8Band cited South Korea's LG Electronics and China's Haier as among possible suitors.” (Reuters UK via Wall St.net, May 19th)

Lowe's Profit Falls 18%, Hurt By Housing Market. “Lowe's Cos. (LOW), the No. 2 U.S. home-improvement retailer, said Monday that its first-quarter profit dropped 18%... The company lowered its full-year outlook and said it's taking a close look at its store expansion pipeline… Net income at Lowe's dropped to $607 million, or $0.41/share, from $739M, or $0.48/share, in the year-earlier period. Sales fell 1.3% to $12 billion in Q1, while same-store sales decreased 8.4%. Lowe's said it expects a per-share profit of $0.54-$0.59 for Q2’08 and $1.45-$1.55 for the year, on continued declines in comparable-store sales. In February, its outlook for the fiscal year ending Jan. 30 was pegged at $1.50-$1.58/share.” (MarketWatch, May 19th)

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