- Pre-Market Indications

Tuesday, May 20, 2008

Opening View: Home Depot, Staples, Target Create Retail Earnings Bonanza

Turning to earnings, Home Depot (HD: View sentiment for HDsentiment, chart, options) said first-quarter net income dropped 66% to $356 million, or 21 cents per share. The results were impacted by a $543 million charge on the closing of 15 stores and removal of 50 stores from the future growth pipeline. Sales fell 3.4% to $17.91 billion, with same-store sales down 6.5%. On an adjusted basis, earnings would have arrived at 41 cents per share. Analysts were looking for a profit of 37 cents per share on sales of $17.64 billion. "The housing and home improvement markets remained difficult in the first quarter; in fact, conditions worsened in many areas of the country," CEO Frank Blake said.

Elsewhere, Staples (SPLS: View sentiment for SPLSsentiment, chart, options) said that its first-quarter profit rose to $212.3 million, or 30 cents per share, from $209.1 million, or 29 cents per share, last year. Revenue rose to $4.88 billion from $4.59 billion. Analysts were looking for a profit of 30 cents per share. The company said it expects the "weak economic climate to continue throughout 2008," but maintained its previous full-year outlook.

Rounding out our earnings coverage, Target (TGT) reported first quarter earnings of 74 cents per share on revenue of $14.8 billion. Analysts were looking for earnings of 71 cents per share, with revenue of $14.87 billion. The company also noted that gross margins declined slightly from last year and that it was closing its receivables transaction with J.P. Morgan Chase.

In the financial realm, Barclays (BCS: View sentiment for BCSsentiment, chart, options) is reportedly considering acquisitions of banks ranging from Lehman Brothers (LEH: View sentiment for LEHsentiment, chart, options) and UBS (UBS: View sentiment for UBSsentiment, chart, options) to Britain's Alliance & Leicester, according to the Daily Telegraph. However, the report cited no sources, and Barclays said it doesn't comment on market speculation.

Opening View: Home Depot, Staples, Target Create Retail Earnings Bonanza

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