On Friday, Feb. 23, home improvement giant Lowe's (NYSE:LOW) released fourth-quarter and year-end results for the period ended Feb. 2. Here are the quick-and-dirty details for the quarter.

  • Total reported sales fell 3.7%, but last year's quarter included an extra week. Adjusting for the extra week, management stated total sales improved 5%, even though same-store sales fell 5.3%.
  • Net profit fell 11.5%, but diluted earnings only fell 7%, because the company repurchased shares.
  • Management summarized its current challenges in the earnings press release: "Sales continued to be pressured by a slowing housing market, tough comparisons to last year's hurricane recovery and rebuilding efforts and significant deflation in lumber and plywood prices"
  • Lowe's is currently projecting fiscal year 2007 diluted earnings of $2.02-$2.09 per share, for year-over-year growth of only a couple of percentage points.
  • For comparison purposes, orange archrival Home Depot (NYSE:HD) posted an even drearier fourth quarter, as did rival Builders FirstSource (NASDAQ:BLDR) today.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$10,406

$10,808

(3.7%)

Net Profit

$613

$693

(11.5%)

EPS

$0.40

$0.43

(7.0%)

Diluted Shares

1,549

1,600

(3.2%)

*Three months ended Feb. 2, 2007 and Feb. 3, 2006.

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

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

35.4%

35.0%

0.4

Operating Margin

9.6%

10.8%

(1.2)

Net Margin

5.9%

6.4%

(0.5)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$796

$876

(9.1%)

Inventory

$7,144

$6,635

7.7%



Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$3,524

$2,832

24.4%

Long-Term Debt

$4,325

$3,499

23.6%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q4 2006

Q4 2005

Change

Cash From Ops.

$4,502

$3,842

17.2%

Capital Expenditures

$3,916

$3,379

15.9%

Free Cash Flow

$586

$463

26.6%

*12 months ended Feb. 2, 2007 and Feb. 3, 2006.

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Fool contributor Ryan Fuhrmann is long shares of Home Depot but has no financial interest in any other company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.