NEW YORK (AP) — Lowe's Cos. said Monday its fiscal fourth-quarter net income rose 13 percent, better than analysts expected, as homeowners took on more home-improvement projects during mild winter months.
The results are the latest sign that the housing sector may slowly be improving. Last week, Lowe's larger rival Home Depot Inc. reported its fourth-quarter profit rose for similar reasons.
"We have seen an uptick in activity," Lowe's CEO Robert Niblock said in a telephone interview. "We did have favorable weather, but even beyond that there's a greater willingness of the consumer to spend."
Home repair and maintenance are still the biggest projects people take on, he said, with demand for larger-scale renovations such as kitchen remodeling still lagging, Niblock said.
The company has also been moving away limited-time sales in favor of lowering prices permanently in some areas to better compete with chief rival Home Depot. Niblock said the price-cutting is largely complete and now the company is working with vendors to lower costs.
He declined to give specifics on how much the company has lowered prices, but said some categories, like appliances, will still see periodic sales rather than across-the-board price cuts.
Lowe's reported net income of $322 million, or 26 cents per share, for the period ended Feb. 3. That's up from $285 million, or 21 cents per share, a year earlier.
The most recent quarter included 3 cents per share for store closings and other items. Removing those items, earnings were 29 cents per share.
Analysts predicted 24 cents per share, according to a FactSet survey. Analysts' estimates typically exclude unusual items.
Revenue rose to $11.63 billion from $10.48 billion, topping Wall Street's estimate of $11.35 billion.
The Mooresville, N.C., company said that an extra week in the period contributed $766 million to its sales and about 5 cents per share to its earnings.
Revenue at stores open at least a year rose 3.4 percent overall and 3.5 percent in the U.S. This metric is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.
For the full year, Lowe's earnings declined 9 percent to $1.84 billion, or $1.43 per share, from $2.01 billion, or $1.42 per share, a year earlier. Annual revenue rose 3 percent to $50.21 billion from $48.82 billion.
Revenue at stores open at least a year was nearly flat for the year.
One analyst said Lowe's was moving in the right direction.
"We continue to believe that a housing recovery is coming, and when it arrives we would expect even stronger (revenue in stores open at least one year) and margin expansion," said Credit Suisse analyst Gary Balter, who rates the company "Outperform."
Lowe's predicts fiscal 2012 earnings of $1.75 to $1.85 per share. Revenue is expected to rise 1 percent to 2 percent, which implies $50.69 billion to $51.2 billion.
Analysts foresee full-year earnings of $1.81 per share on revenue of $50.23 billion.
Lowe's had 1,745 stores in the U.S., Canada and Mexico at the quarter's end.