Lowe’s 1st-quarter net income edges up on rebound in spending on home-improvement projects

Lowe’s 1Q net income edges up as spending rises

NEW YORK — Lowe’s Cos. said Monday its net income rose 2.7 percent in the first quarter as people spent more money on home-improvement projects and bought more big-ticket items.

The No. 2 home-improvement retailer raised its guidance for the year, though it fell shy of analyst expectations and shares fell in premarket trading.

The company, based in Mooresville, N.C., said it earned $489 million, or 34 cents a share, in the three-month period ended April 30. In the same period last year the Mooresville, N.C., company earned $476 million, or 32 cents a share.

Revenue rose 4.7 percent to $12.39 billion.

The results handily beat the expectations of analysts. According to Thomson Reuters, analysts expected the company to earn 31 cents a share on revenue of $12.24 billion.

Home improvement retailers have been hurting in the weak economy as shoppers cut back on their spending to focus on only essentials. But CEO Robert Niblock said in a statement people are again taking on projects and buying big-ticket items. Government stimulus programs including tax credit for home buyers and rebates for energy-efficient products and warmer weather also helped results, he said, but added this doesn’t mean a full rebound is in sight.

“While we are optimistic we will experience solid demand through the balance of the year, we view 2010 as a year of transition for our industry,” he said in a statement.

Revenue at stores open at least a year rose 2.4 percent in the quarter. That’s a key figure for retailers because it measures growth at existing stores, rather than new ones.

The company opened 11 stores in the quarter to finish with 1,721 in North America.

For the second quarter and full year, Lowe’s said it expects revenue to rise between 5 percent and 7 percent over the prior year and revenue at stores open at least a year to grow between 2 percent and 4 percent. Previously for the year, the company expected sales to rise between 4 percent and 6 percent, and revenue at stores open at least a year to increase 1 percent to 3 percent.

The company expects second-quarter earnings per share to range from 57 cents to 59 cents, shy of the 62 cents a share analysts expect.

For the full year, Lowe’s now expects earnings per share to range from $1.37 to $1.47. Previously it had expected a range of $1.30 to $1.42. Analysts expect earnings per share of $1.45 for the year on revenue of $49.67 billion, according to Thomson.

Shares fell $1, or 3.8 percent, to $25.07 in premarket trading Monday.