By KELLY EVANS and JOHN FLOWERS
February 26, 2008; Wall Street Journal
Sales of existing homes in the U.S. fell slightly in January, offering a bit of relief from the huge declines of recent months, but analysts said prices must fall further to help clear the oversupply of houses on the market.
The continued weakness in housing pushed down Lowe's Cos.' fiscal fourth-quarter net income by 33%, according to the home-improvement retailer. Lowe's Chairman and Chief Executive Robert A. Niblock said the next several quarters will be challenging "as industry sales are likely to remain soft."
The National Association of Realtors said home resales slipped a seasonally adjusted 0.4% last month from December to an annual selling pace of 4.89 million units. That was 23.4% below the pace recorded a year earlier. Condominium and co-op sales slumped but sales of single-family homes rose 0.5%, the first monthly increase in 11 months.
At January's sales pace, it would take 10.3 months to sell the houses currently on the market. That is up from 9.7 months in December.
The overall median sales price for existing homes in the U.S. was $201,100 in January, down 4.6% from $210,900 a year earlier. Housing experts say that potential buyers are waiting for prices to drop further before jumping back into the market.
Mr. Niblock said Lowe's sales were below expectations "as we faced an unprecedented decline in housing turnover, falling home prices in many areas and turbulent mortgage markets that impacted both sentiment related to home-improvement purchases, as well as consumers' access to capital."
On top of the housing-market downturn, the fourth quarter is typically the weakest for home-improvement retailers as colder weather curtails building and renovation projects.
For the quarter ended Feb. 1, net income at Lowe's slumped to $408 million, or 28 cents a share, from $613 million, or 40 cents a share, a year earlier. Net sales slipped 0.3% to $10.38 billion as same-store sales declined 7.6%.
In November, Lowe's projected earnings of 25 cents to 29 cents a share on a 3% increase in revenue, with same-store sales declining 3% to 5%.
Gross margin fell to 34.9% from 35.4%.
Lowe's forecast fiscal first-quarter earnings of between 38 cents and 42 cents a share on revenue growth of 2% and a same-store sales decline of between 5% and 7%. The company also expects fiscal 2008 earnings to be between $1.50 to $1.58 a share on revenue growth of 3% and a same-store sales decline of 5% to 6%.
Analysts' mean estimates were for first-quarter earnings of 43 cents a share on revenue growth of 4% to $12.61 billion, and 2008 earnings of $1.74 a share on revenue growth of 5% to $50.75 billion.
Home Depot Inc., the U.S. market leader in home-improvement products in terms of revenue, is scheduled to report earnings today.
The home-sales data, which some interpreted as suggesting the worst may be over for the housing market, were credited with helping fuel gains on Wall Street yesterday. In 4 p.m. composite trading on the New York Stock Exchange, Lowe's rose 91 cents, or 3.9%, to $24.50. Home Depot gained $1.05, or 3.8%, to $28.82.
February 26, 2008; Wall Street Journal
Sales of existing homes in the U.S. fell slightly in January, offering a bit of relief from the huge declines of recent months, but analysts said prices must fall further to help clear the oversupply of houses on the market.
The continued weakness in housing pushed down Lowe's Cos.' fiscal fourth-quarter net income by 33%, according to the home-improvement retailer. Lowe's Chairman and Chief Executive Robert A. Niblock said the next several quarters will be challenging "as industry sales are likely to remain soft."
The National Association of Realtors said home resales slipped a seasonally adjusted 0.4% last month from December to an annual selling pace of 4.89 million units. That was 23.4% below the pace recorded a year earlier. Condominium and co-op sales slumped but sales of single-family homes rose 0.5%, the first monthly increase in 11 months.
At January's sales pace, it would take 10.3 months to sell the houses currently on the market. That is up from 9.7 months in December.
The overall median sales price for existing homes in the U.S. was $201,100 in January, down 4.6% from $210,900 a year earlier. Housing experts say that potential buyers are waiting for prices to drop further before jumping back into the market.
Mr. Niblock said Lowe's sales were below expectations "as we faced an unprecedented decline in housing turnover, falling home prices in many areas and turbulent mortgage markets that impacted both sentiment related to home-improvement purchases, as well as consumers' access to capital."
On top of the housing-market downturn, the fourth quarter is typically the weakest for home-improvement retailers as colder weather curtails building and renovation projects.
For the quarter ended Feb. 1, net income at Lowe's slumped to $408 million, or 28 cents a share, from $613 million, or 40 cents a share, a year earlier. Net sales slipped 0.3% to $10.38 billion as same-store sales declined 7.6%.
In November, Lowe's projected earnings of 25 cents to 29 cents a share on a 3% increase in revenue, with same-store sales declining 3% to 5%.
Gross margin fell to 34.9% from 35.4%.
Lowe's forecast fiscal first-quarter earnings of between 38 cents and 42 cents a share on revenue growth of 2% and a same-store sales decline of between 5% and 7%. The company also expects fiscal 2008 earnings to be between $1.50 to $1.58 a share on revenue growth of 3% and a same-store sales decline of 5% to 6%.
Analysts' mean estimates were for first-quarter earnings of 43 cents a share on revenue growth of 4% to $12.61 billion, and 2008 earnings of $1.74 a share on revenue growth of 5% to $50.75 billion.
Home Depot Inc., the U.S. market leader in home-improvement products in terms of revenue, is scheduled to report earnings today.
The home-sales data, which some interpreted as suggesting the worst may be over for the housing market, were credited with helping fuel gains on Wall Street yesterday. In 4 p.m. composite trading on the New York Stock Exchange, Lowe's rose 91 cents, or 3.9%, to $24.50. Home Depot gained $1.05, or 3.8%, to $28.82.
1 comment:
First time buyer mortgage terms and conditions also vary a lot because property markets differ from one region to another. A person should therefore have information pertaining to the region he wants to buy a house.
First Time Home Buyer Vancouver
Post a Comment