Lowe's rides housing recovery to higher 2Q profit

MOORESVILLE, N.C. (AP) — Lowe's second-quarter net income rose 26%, buoyed by the U.S. housing market's ongoing recovery.

The home-improvement chain's results beat Wall Street expectations. The company raised its full-year earnings and revenue forecasts Wednesday.

The strong performance comes a day after rival Home Depot's results also topped analysts' estimates.

The housing market has continued to improve. On Friday, the Commerce Department said builders began work on houses and apartments at a seasonally adjusted annual rate of 896,000 in July. That was up 6% from June, though below a recent peak of more than 1 million in March.

For the period ended Aug. 2, Lowe's earned $941 million, or 88 cents per share. That's up from $747 million, or 64 cents per share, a year ago.

Revenue increased 10% to $15.71 billion from $14.25 billion.

Analysts surveyed by FactSet expected earnings of 79 cents per share on revenue of $15.07 billion.

Revenue at stores open at least a year climbed 9.6%. This metric is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.

Lowe's now anticipates fiscal 2013 earnings of about $2.10 per share, with revenue up approximately 5%. The company previously predicted earnings of about $2.05 per share, with revenue up approximately 4%. Based on 2012's revenue of $50.52 billion, the new outlook implies about $53 billion in revenue.

Wall Street expects earnings of $2.10 per share on revenue of $52.17 billion.

Lowe's Cos. had 1,758 stores in the U.S., Canada and Mexico at quarter's end. Its stock was up more than 5% at $46.37 a share heading into the afternoon