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Driven by resurgence in the U.S. housing market, Lowe’s Companies Inc. (LOW - Analyst Report) posted robust results for the third quarter of fiscal 2013, with earnings rising 34.3% year over year to 47 cents per share. However, quarterly earnings missed the Zacks Consensus Estimate by a penny.

This Zacks Rank #3 (Hold) stock witnessed a 7.3% rise in total revenue to $12,957 million and handily beat the Zacks Consensus Estimate of $12,703 million. Moreover, comparable-store sales rose 6.2% on a consolidated basis in the quarter.

The year-over-year top-line growth was primarily driven by the company’s better capitalization of the rebounding domestic housing market. During the quarter, Lowe’s witnessed solid performances across all product categories.

In dollar terms, gross profit rose 8.2% year over year to $4,481 million. However, gross profit margin remained almost flat year over year at 34.58% in the quarter as the benefit of increased top line was fully offset by rise in cost of goods sold.

Other Financial Aspects

Lowe’s ended the quarter with cash and cash equivalents of $1,101 million, long-term debt (excluding current maturities) of $10,090 million and shareholders’ equity of $12,651 million, reflecting a debt-to-capitalization ratio of 44.4%.

During the quarter, the company repurchased $761 million worth of its common stock and distributed $191 million through dividends.

Fiscal 2013 Outlook

Buoyed by better-than-expected quarterly results, the company raised its outlook for fiscal 2013. Lowe’s now expects sales to rise by nearly 6% and comparable store sales by about 5%. Earlier, Lowe’s had anticipated sales and comparable store sales to increase 5% and 4.5%, respectively. Further, management raised its earnings expectation for fiscal 2013 to $2.15 per share from $2.10 forecasted earlier.

The company also raised its growth projection for earnings before interest and taxes (EBIT) as a percentage of sales or operating margins to 75 bps year over year in fiscal 2013, against 65 bps projected previously.

Moreover, the company intends to open 9 stores in the remainder of fiscal 2013. As of Nov 1, 2013, the company operated 1,831 locations in the United States, Canada and Mexico.

Other Stocks to Consider

Better performing stocks in the building product retail industry space include Builders FirstSource, Inc. (BLDR - Snapshot Report), Lumber Liquidators Holdings, Inc. (LL - Snapshot Report) and The Home Depot, Inc. (HD - Analyst Report). While Builders FirstSource has a Zacks Rank #1 (Strong Buy), both Lumber Liquidators Holdings and The Home Depot carry a Zacks Rank #2 (Buy).

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