Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:
Home Depot To Be 'Opportunistic' On Flat Screens [MarketWatch.com]
Summary: Home Depot reported its first drop in quarterly net income since 2003 in its Q3 earnings announcement yesterday. During its conference call, an analyst asked about its TV strategy. CEO Bob Nardelli replied saying it is "opportunistic" and, "We know that it's a highly sought-after commodity, particularly in the holiday seasons. This is kind of an in and out on consumer electronics, particularly the flat-panel, plasma TVs." Home Depot will be competing against consumer electronics stores such as Best Buy and Circuit City, as well as against rival retail giants Costco and Wal-Mart. A Morningstar analyst commented, "They get a lot of store traffic. The consumer's in there, and if they see a compelling value they'll make a purchase, [but] I don't see [Home Depot] becoming a force in consumer electronics; I don't think Best Buy or Circuit City are shaking in their boots." Also, during the conference call, Nardelli said he does not see returns being a problem, stressing the "in-and-out" strategy of bringing TVs in on container loads and distributing them.
Related links: Media coverage: MarketWatch: JP Morgan Upgrades Home Depot. Commentary: Circuit City: Flat Panel TV Prices Falling Even Faster Than Expected • Discount Electronics Retailers, Led By Wal-Mart, Launch First Christmas Sale Salvo • Electronics Products Should Provide Christmas Bargains for Consumers, Lower Profit Margins for Manufacturers • Here a Flat Panel, There a Flat Panel... • Flat Panel TV Sales Strong, Gap Grows Between Wholesale/Retail Pricing • Home Depot Rising Despite Disappointing Earnings • Home Depot Reports First Drop In Net Earnings Since 2003 • SeekingAlpha's sector coverage of Flat Panel TVs & Monitors. Conference call transcripts: The Home Depot F3Q06.
Potentially impacted stocks and ETFs: Home Depot (NYSE:HD) • Competitors: Lowe's (NYSE:LOW), Best Buy (NYSE:BBY), Circuit City (NYSE:CC), Costco (NASDAQ:COST), Radio Shack (NYSE:RSH), Wal-Mart (NYSE:WMT) • ETFs: Retail HOLDRs (NYSEARCA:RTH), Consumer Discretionary SPDR (NYSEARCA:XLY), Vanguard Consumer Discretionary (NYSEARCA:VCR), iShares Dow Jones US Consumer Services (NYSEARCA:IYC), PowerShares Dyn Building & Construction (NYSEARCA:PKB)
Seeking Alpha is not affiliated with MarketWatch.com.