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Home Depot (HD) Tops Q2 Earnings & Sales, Raises Outlook

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The Home Depot Inc. (HD - Free Report) , the world’s largest home improvement retailer, released second-quarter fiscal 2015 results, wherein adjusted earnings of $1.71 a share came a penny ahead of the Zacks Consensus Estimate. Moreover, the bottom line jumped 12.5% from $1.52 a share earned in the year-ago quarter.

Taking one-time items, the company’s quarterly earnings came in at $1.73 per share, up 13.8% year-over-year.

Earnings Estimate Revision: The Zacks Consensus fiscal 2015 Estimate portrays a flat trend in the last 30 days. Moreover, in the trailing four quarters (including the quarter under review), the company has outperformed the Zacks Consensus Estimate by an average of 3.9%.

Revenues: Home Depot’s net sales increased 4.3% year over year to $24,829 million, also surpassing the Zacks Consensus Estimate of $24,660 million. Comparable store sales grew 4.2%, while comps for the U.S. stores rose 5.7%.

The company’s results gained from balanced business growth and the ongoing U.S. housing market recovery.

Key Events: Home Depot penned an agreement to acquire Interline Brands, Inc. in an all-cash deal worth $1.625 billion. The acquisition, which will help Home Depot to better serve the needs of its Pro customers, is expected to conclude in the third quarter of fiscal 2015 and be accretive to current year’s bottom line.

Considering all aforementioned factors, the company raised its sales and earnings outlook for fiscal 2015. As a result, sales are now expected to increase in the range of 5.2%-6.0% with comparable store sales growth in a range of 4.1%-4.9%. Consequently, earnings per share is now envisioned in a band of $5.31- $5.36, reflecting a 13%-14% year over year growth.

Zacks Rank: Currently, Home Depot carries a Zacks Rank #3 (Hold) which is subject to change following the earnings announcement.

Check back later for our full write up on Home Depot’s earnings report!

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