Fourth-quarter net income at Lowe's came in 27% higher at $508 million, or $0.64 per diluted share. Sales increased 18% to $8.55 billion, with same-store sales increasing 6.9%.
We got a dose of similar tidings yesterday, when Fool contributor W.D. Crotty took a look at Home Depot's
However, Lowe's released a forecast that was actually lower than previous estimates, which might have given investors a chill. Analysts were expecting first-quarter earnings of $0.80 per share, and Lowe's said today that earnings will come in at $0.75 to $0.77 per share in the first quarter. When it comes to the full year, analysts were expecting earnings of $3.34, and Lowe's said it expects earnings of $3.25 to $3.34 for 2005.
Of course, here at the Fool, we don't take too much stock in analysts' estimates, subsequent "disappointments," and all that jazz. According to The Wall Street Journal, Lowe's management said that a few cents in earnings will be shaved off first-quarter results due to accounting charges, not some slowdown in consumer spending on new plumbing, kitchen remodeling, or other types of home improvement.
Regardless, for any investors looking for cheap investments, these two giants of home improvement don't seem to be the place to look for now. As W.D. said yesterday, while these are great companies and solid performers, at the moment it's arguable that they are currently priced at premiums. A better time to buy may reveal itself later.
Alyce Lomax does not own shares of any of the companies mentioned.