Feb 25, 2003 By Paul Nowell Ap Business Writer 2 min read

CHARLOTTE, N.C. (AP) – Lowe’s Cos., capitalizing on a surprisingly strong housing market, reported a 46 percent increase in its fourth-quarter earnings, easily surpassing Wall Street’s expectations. The nation’s second-largest home improvement chain behind The Home Depot Inc. also offered an upbeat profit outlook Monday, projecting that earnings for the year will beat analysts’ current forecasts.

Lowe’s earned $319.4 million, or 40 cents a share, for the three months ended Jan. 31, up from $218.4 million, or 28 cents a share, in the year-ago period.

Analysts surveyed by Thomson First Call anticipated earnings of 33 cents per share.

Revenue increased 16.5 percent to $6.12 billion from $5.25 billion in the year-ago period.

Sales at stores opened at least a year, known as same-store sales, increased by 4.1 percent. Same-store sales are considered the best gauge of a retailer’s health.

Shares of Lowe’s rose $2.15, or 6 percent, to $38.17 per share in morning trading on the New York Stock Exchange.

“The year ahead holds challenges, but many signs point to a strong home improvement market,” said Robert Tillman, chairman and chief executive in a statement. “Despite the uncertainties that remain in the broader economic and geopolitical environment, I’m optimistic that the home improvement consumer will remain resilient.”

For 2002, net earnings grew 43.8 percent to $1.47 billion, or $1.85 per share, from $1.02 billion, or $1.30 per share, in 2001.

Sales increased 19.8 percent to $26.5 billion from $22.1 billion a year ago.

Same-store sales increased 5.6 percent for the year.

Tillman said despite waning consumer confidence and the advent of war in Iraq, 2002 was “the best year in our 57-year history.”

He called the home improvement market the “sweet spot” in the economy, helped by low mortgage rates and strong demand for refinancing. And he expects the current trends to continue well into 2003.

“We’ll continue to add stores across the U.S. in small and large markets,” he told analysts during a conference call. “Right now only about 22 percent of our stores are in the top 25 markets, where most of the population resides.”

About two out of every three new stores will be built in the top 100 U.S. markets, he said, where the company currently has about 52 percent of its stores.

Looking ahead, the company forecast earnings of $2.16 to $2.20 for the current fiscal year, above analyst projections of $2.11.

The company projects that first-quarter earnings will be 51 cents to 53 cents per share. Analysts expect 51 cents per share.