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Home Depot Beats Estimates; Hackers May Play a Spoilsport

Nov 19,2014  Company News  Comment: 0

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Houston, TX – (StockNewsDesk) – 11/19/2014 — Yesterday, the nation’s largest home building improvement retailer, Home Depot reported results that beat Street’s expectations. However, hackers managed to steal 53 million emails ids and 56 million credit card numbers from the company’s database. This made investors skeptical about the company’s security systems. The company has warned that the cost of this loss of data is around $28 million for this fiscal year. The figure can go up to $34 million in the following year.

For the third quarter, Home Depot reported earnings of $1.53 billion or an Earnings Per Share (EPS) of $1.15 a share. These figures are well above earlier year’s profit of $1.35 billion or EPS of $0.95 a share. Sales of the company increased to $20.52 billion from the earlier year’s sales figure of $19.47 billion, up 5%. The revenue figures were better than the analysts’ expectation by $0.10 billion. On a global basis, new stores that hit the market last year saw a jump of 5.2% in sales while the growth in U.S. saw a growth of 5.8%. The profit figures disclosed a pre-tax gain of $100 million. This gain came from a sale of the company’s HD Supply Holdings. Transaction activity increased over 3%, while the average ticket showed an improvement 2%. These improvements indicate an improvement indirectly in the Housing sector.

The company maintained its guidance despite loss of huge data and exposure to face losses. The company expected to earn a fiscal profit of $4.54 a share. The company expects revenue to rise by 4.8%.

Home Depot Beats Estimates; Hackers May Play a Spoilsport

Investors remain bullish on the company’s earnings as robust improvement in the US economy. The economy has added more than 200,000 jobs in past nine months. Increase in demand and robust growth in the housing sector is primarily responsible for the increase in employment. This indicates strong buying and positive optimism over the economy. According to the Reuters, US Home builder sentiment has touched its highest level in August and September. This being said, the company may face heat because of losing of 53 million email IDs and credit card numbers to hackers. The company is already facing more than 44 civil lawsuits. The company has to walk an extra mile to regain people’s trust.

The financial future of Home Depot is quite bright once the issue of hackers stealing millions of data is over. Improving macro-economic factors point towards high demand and growth of the housing sector, which will ultimately help the company achieve heights.

 

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