MOORESVILLE, N.C. (AP) — Lowe's was beset by hefty charges and meager traffic in its stores for most of the third quarter, and its profit suffered for it.
A day after rival Home Depot posted banner results and boosted its outlook for the year, Lowe's fell drastically short of Wall Street expectations and cut its annual outlook, again.
Its shares fell 3.6 percent in afternoon trading Wednesday.
For the three months ended Oct. 28, Lowe's earned $379 million, or 43 cents per share. A year ago the Mooresville, North Carolina, company earned $736 million, or 80 cents per share.
The current quarter's results included $462 million in charges related to the winding down of its Hydrox joint venture, writing off projects that were canceled and goodwill and impairment charges. Stripping out these charges, earnings were 88 cents per share.
Analysts polled by Zacks Investment Research expected 96 cents per share.
Revenue rose to $15.74 billion from $14.36 billion, but that was also shy of most analysts' projections.
Historically low mortgage rates have been helping to boost the housing market, along with refinancing that is typically used for home improvements.
Home sales this year have leveled off at a nearly healthy level of 5.5 million. Mortgage News Daily this week reported that 30-year fixed rate mortgages hit 4 percent. That's up from the 3.57 percent rate that was reported last Thursday by mortgage giant Freddie Mac.
Chairman and CEO Robert Niblock said sales, after beginning slowly, had begun to recover by October.
Sales at stores open at least a year climbed 2.7 percent. This figure is a key indicator of a retailer's health because it excludes results the volatility from locations recently opened or closed.
For fiscal 2016, Lowe's Cos. now anticipates earnings of about $3.52 per share. Revenue is expected to rise 9 percent to 10 percent, with sales at stores open at least a year up 3 percent to 4 percent.
Its prior forecast was for earnings of about $4.06 per share, which had been lowered from an earlier projection of $4.11.
Lowe's had also predicted that revenue would be up approximately 10 percent and same-store sales would climb about 4 percent.
Analysts surveyed by FactSet expect full-year earnings of $4.00 per share.
Lowe's shares dropped $2.47, or 3.6 percent, to $66.58 in afternoon trading. Its shares are down 7 percent versus a year ago.
Lowe's had 2,119 home improvement and hardware stores in the United States, Canada and Mexico at the third-quarter's end.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on LOW at https://www.zacks.com/ap/LOW
Keywords: Lowe's, Earnings Report, Priority Earnings