Home Depot Hit by Housing: Fool by Numbers

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On Nov. 14, Inside Value selection Home Depot (NYSE: HD) released third-quarter earnings for the period ended Oct. 29.

• Retail sales were flat in a slow housing market, but HD Supply showed 159% sales growth.
• EPS grew 1.4%, helped by a decline in the diluted share count.
• Home Depot believes that its FY 2006 sales will grow by approximately 12% and diluted earnings per share will grow by 4%-5%.
• Home Depot has a two-star rating in Motley Fool CAPS.

(Figures in million, except per-share data)

Income Statement Highlights

	Q3 2006	Q3 2005	Change
Sales	$23,085	$20,744	11.3%
Net Profit	$1,490	$1,538	(3.1%)
EPS	$0.73	$0.72	1.4%
Diluted Shares	2,050	2,138	(4.1%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	32.7%	33.6%	(0.9)
Operating Margin	10.7%	11.9%	(1.2)
Net Margin	6.5%	7.4%	(1.0)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2006	Q3 2005	Change
Cash + ST Invest.	$617	$1,378	(55.2%)
Accounts Rec.	$3,593	$2,550	40.9%
Inventory	$13,707	$12,039	13.9%

	Q3 2006	Q3 2005	Change
Accounts Payable	$8,670	$8,101	7%
Long-Term Debt	$6,671	$2,661	150.7%

Learn the ways of the balance sheet.

Cash Flow Highlights

No data provided.

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Related Companies:

• Lowe's (NYSE: LOW)
• Building Materials Holdings (Nasdaq: BMHC)
• Builders First Source (Nasdaq: BLDR)
• Wal-Mart (NYSE: WMT)

Related Foolishness:

• Squeezing Home Depot's Orange
• Dueling Fools: Home Depot
• Home Depot in High Definition

Home Depot and Wal-Mart are Inside Value recommendations.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.