It seems Lowe's (NYSE:LOW) is mortal after all.

You have to admit -- last quarter, the verdict was very much in doubt as Lowe's grew its sales nearly 6% despite negative same-store sales, and turned in double-digit profits growth. In an economic environment roundly described as "challenging," that was quite a feat.

But no such luck this time around. Although its sales did manage to eke out a small gain this quarter, comps were again down (4.3% this time), and net profits fell 10% (pared to a 6.5% decline at the per-share level, thanks to stock buybacks).

Moreover, free cash flow for the first three quarters of this year is running 5% lower than last year at $873 million. But to its credit, at least Lowe's did have the courtesy of telling investors what its cash flow was.

It coulda been worse. It coulda been Home Depot
And yet, as low as Lowe's limboed, Home Depot (NYSE:HD) ducked lower last week. Next door, the guys in the orange aprons reported a 6.2% decline in comps, a sales decline of 3.5%, and a 9.2% drop in per-share profits from continuing operations. So if you're a Lowe's shareholder, count your blessings that you didn't invest in the other guy.

No, wait. Actually, it is worse
Not that I mean to dismiss the pain that Lowe's shareholders are feeling today. They got more than one nasty surprise on Monday. As recently as September, CFO Robert Hull was reassuring shareholders that he expected this year's earnings to fall "slightly" short of the $1.97 to $2.01 per share previously promised, for a modest decline in comparison with fiscal 2006. No more. That guidance hit a table saw yesterday, as management walked it back to a $1.83 to $1.87 range -- a 7.6% decline year over year.

The good news: CEO Robert Niblock says Lowe's new-and-improved guidance range accounts for anticipated pressures from "the ongoing housing correction, tighter credit standards in the mortgage market, and rising financial obligations" and is "appropriately conservative given the uncertainties that exist."

This should be the end of the earnings warnings. Investors should hope so -- because the market sure didn't like this last one. But I shudder to think what will happen to these shares if Niblock's appropriate conservatism proves inappropriately liberal since recent performance at homebuilders like D.R. Horton (NYSE:DHI) and Toll Brother's (NYSE:TOL) signals that the housing market will not be improving any time soon.

For the latest lowdown on Lowe's, read:

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Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool's disclosure policy says you can invest in it. We can help.