As expected (by HP) - missed sales, missed profits and took down their future projections.
No surprise for HP'ers. Big surprise for Home Depot management. Big surprise for Wall Street. Big surprise for "analysts"
Yeah, right.
Home Depot cuts outlook amid housing slowdown
ATLANTA (Reuters) - Home Depot Inc. on Tuesday reported lower third-quarter profit that missed Wall Street estimates and sharply cut its forecast for earnings and sales growth this year as the U.S. housing slowdown crimps spending.
Home Depot sharply pared its growth forecast, saying it now expected per-share profit to rise 4 percent to 5 percent for the current fiscal year, while sales would increase about 12 percent.
In August, Home Depot had said full-year results would come in at the low end of projections of a 10 percent to 14 percent increase in per-share earnings and a 14 percent to 17 percent rise in sales.
Home Depot shares fell 24 cents to $36.40 in Monday trading, while Lowe's shed 17 cents to $29. Home Depot's stock has fallen about 11 percent this year, while Lowe's is off 13 percent.
November 14, 2006
As predicted, Home Depot got slaughtered
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Bob Nardelli, chairman, president and chief executive, labeled the housing environment as "very challenging."
"The weaker than expected third quarter results and fiscal 2006 outlook that Home Depot reported this morning show that a slower housing market is having a more pronounced impact on the economy," UBS analyst Brian Nagel wrote in a note to clients. "We remain concerned with prospects for the leading home improvement centers."
Shares were down about 3.9% in premarket trading.
maybe they can buy the pets.com puppet
Excellent call Keith!
I would say looking quickly over the WalMart numbers, there is some funny accounting going on to get that 11% profit rise.
I had a chat with a local realtor over the weekend, she said things had been "slow." That was it, simply "slow."
While those with their fingers on the pulse of the market see things as slow, it is also clear to me that the overwhelming majority of people I know and see either deny that the market is crashing or simply have never even considered that the market was anything but sky-high.
This has led me to believe that the coming real estate collapse has not yet begun in earnest, and the present slowness is nothing but a precursor. News of the slowdown has not yet filtered through the great masses of people, and it will not likely do so for some time to come, but when it does, things will get plenty ugly plenty fast.
Remember back to that whole Y2K thing, people ignored the problem for so long hoping it would just go away and then in 1999 people panicked and overreacted. So our's is a culture of denial, procrastination and panic.
So where on the "denial, procrastination, panic" scale are we? I say somewhere between denial and procrastination. People are just starting to wake up to the notion that housing is overinflated. It will be quite a while till people start to act on their fears, and once they do, people will be running for the exits faster than Rhode Island rockers in a burning club.
Excellent call Keith!
I would say looking quickly over the WalMart numbers, there is some funny accounting going on to get that 11% profit rise.
--------------------
Nice work Keith...for real Anono 11% BS! at its finest. It amazes me the blatant corporate fraud that has been going on...anyone..
I mean anyone who would invest their savings into these corporate frauds is gambling their money away IE: Enron...its like taking your portfolio going to Foxwoods Casino and putting it all on the Red..no difference in my book. Got Metal!
P.S Homedepot sucks anyway..throw away tools!
the exits faster than Rhode Island rockers in a burning club.
-------------------
Terrible reference & very disrespectful thinker, I lost friends in that fire..asswipe!
please watch the chart since they have startet their 13 billion $ buyback....
http://immobilienblasen.blogspot.com/2006/11/home-depot-net-income-falls-first-time.html
What's HD's biggest problem?
Nardelli
The stock will bounce when they give that bozo the heave-ho.
"I mean anyone who would invest their savings into these corporate frauds is gambling their money away"
yeah, that warren buffet is a moron.
the problem with most of today's corporate world is that most executives spend all there time trying to please the jim cramers of the world rather than the warren buffets.
i think the company i work for is pretty decent but buffet wouldnt touch us with a 10ft poll.
ATLANTA, Nov 14 (Reuters) - Top home improvement retailer Home Depot Inc. (HD.N: Quote, Profile, Research) on Tuesday said its per-share profit could decline 12 percent to 16 percent in the fourth quarter, as the U.S. housing market slowdown continues, and weakness is expected to continue in 2007.
In home improvement, "I don't think we've seen the bottom yet," Home Depot Chairman Robert Nardelli told analysts during a conference call after finance chief Carol Tome gave the fourth-quarter forecast.
"I don't see anything that suggests it's going to get significantly better in '07," Nardelli added.
4th quarter will be brutal on profits as they slash prices at wal-mart:
However, Chief Executive Lee Scott was upbeat about the holiday season, the retailer's most important shopping period, and vowed that Wal-Mart (WMT : Wal-Mart Stores, Inc.
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WMT47.89, +1.57, +3.4%) would lure customers with deep discounting.
"No one will doubt Wal-Mart's leadership on price and sales," Scott said on a pre-recorded earnings call with other company executives.
Shares of Wal-Mart, also a Dow component, opened 3.6% higher at $47.99.
In particular, he called this year's holiday marketing "the most aggressive pricing strategy ever" on key categories like toys and electronics. Already, Wal-Mart has substantially slashed prices on laptop computers, flat-panel televisions and telephones, a move that Scott said has been successful in bringing in customers.
In Chicago, there is a H.D. on North Ave near the river. It used to be called "Ho Depot". All the hookers walking back and forth on North would go to the Home Depot when the police were on them because it was open 24 hours.
A few months back I went there late at night,a nd it was closing at 10! I knew the bubble had burst.
WOW - it opened down a whole 1%!
Marky Mark
Can the US consumer live without equity extraction?
http://tinyurl.com/ty3ye
this about sums it up!
Seriously, how much longer can the flying Wallendas keep the Dow high wire act going?
Seriously, how much longer can the flying Wallendas keep the Dow high wire act going?
----------------
until the fat lady sings Buzz...my thing is are people that stupid to actually believe what they are seeing?
Denial is still in the air.
I want to see real pain and a killer depression. I want to see misery, that is all that my bubble headed self knows.
-Bubble Head
Keith - do you have a crystal ball??? . . .you hit the report right on the head!
"The Thinker said....
This has led me to believe that the coming real estate collapse has not yet begun in earnest, and the present slowness is nothing but a precursor. News of the slowdown has not yet filtered through the great masses of people, and it will not likely do so for some time to come, but when it does, things will get plenty ugly plenty fast."
Couldn't agree more!
With all the housing market freefall 'teasers' cropping up on the MSM, we here at HP sometimes have to remind ourselves of the golden rule: HOUSING IS STICKY ON THE WAY DOWN!
Unlike AmeriTrade, you can't bring up 'AmeriHouse' on the pc, hit sold, done, gone, thank you and what credit card would you like that $8 dollar trading fee charged to? It doesn’t work like that. Damn, it would be nice if it did. Instant overnight bubble pop, on to the next one!
Most Americans are also so completely hard-wired to believe ( thanks to family, friends, neighbors, the REIC,) that no matter what, owning a house if their ultimate goal in life. They will do anything to make that mortgage payment, run up any amount of debt, hold two jobs, borrow, beg, steal, whatever.
Only looking back, in say, 20 years, will we be able to put a definite date on all the stages of the decline.
For all the bad news on Home Depot and Lowes, I don’t see any prices coming down
on the basics: 2x4’s, sheetrock, plywood, electric wire.( I got a couple projects I’d like to do inside this winter, and the only things I buy at HD or Lowes are the basics.) Ask any department manager and you get the standard BS: ”Well, these items are all commodities. They float with the market. We will match our prices against anyone. Better buy it now because it's only going to go up. etc., etc.
Hello, can you say George Ramaro fan club! This place looks like Night Of The Living Floorwalkers its so dead ,compared to even 3 months ago!.
An employee told me that they are told to park their cars out on the front lot now to make it look like there's people inside.
I have a feeling that the building supply industry is holding out for the prices they "deserve".
Oh well, I can wait!
Keith, I like how you manipulate the article and take out things that could be construed not as terrible as you make them out to be. HD profit dropped a whole 3%!!!! Earnings estimates were severely pared to +4-5%!!!! God, the sky is falling!!!! Oh, and the stock tanked too. Down 1%!!!!!!!!!!! Why would you people listen to such an idiot when it comes to finance? This guy is probably a janitor jerking off in the corner to little children.
Keith
Haven't posted for a while - glad to see you are making money off this.
:D
As for anonymous above, 1% due to announcement indicates it was worse than expected - all anyone needs to do is look at the share price to see what has happened for the last 6 months.
Like you say, things are not looking good for HD - this slowdown is going to continue for 3 years. They will be a buy again when everyone is dissing purchasing property.
Keith - keep up the good work.
Kind regards,
Phil
Seriously, this has to be the worst post, and no I'm not some troll. I generally like your commentaries, but come on, 0.8% down is being 'slaughtered'? Especially when the market is down 0.3%?
You're turning into realestate equivalent of Autospies.com with this "as predicted" nonsense.
I agree with annonymous two up. So what? It is like a guy who budgets for 10 hours of overtime and then only gets 3 hours and is short a little on his projections and then Keith wills say the guy is ready for bankruptcy. Any business will project what they think will happen next year and few really meet their goals or can predict the unforseen. When I worked for Vencor (now Kindred) they had wonderful projections of income and then they changed some medicare rules and bam, they went bankrupt because they suddenly lost billions in revenue after expanding to meet the need. I doubt that HD or Lowes will have those kind of issues and even if revenue drops 25% it won't be the end of the world.
massive institutional interest in HD kept the plunge from happening today but just watch the freefall from now on
If institutional investors (who have long term horizons) are tying up the shares, then you people on this site who are short are going to have a huge problem if HD's price goes up. You guys will panic and create a short squeeze when the institutional guys know they aren't going to sell. I love to hear inexperienced investors talk about short selling and investing in derivatives when you guys jeer the people who got into exotic mortgages that they didn't know enough about. You guys are all the same.
As of now DR Horton (DHI) is up $1.73 (7.7%) and WCI is up $1.56 (9.87%)
Up is down and down is up.
Go Figure
Anybody know when Lowe's is supposed to report earnings?
Hey hemmorhoid,
I'm not so sure last time I was in there I could not find a single person to help me. I think they will get even worse for customer service.
wow now that's manipulation! bravo wall street!
borka and bork clean it up - kids read HP. take it offline.
Is this your first lover's fight Bork?
Is this your first lover's fight Bork?
------------------
mY first with a Priest and an Alterboy, yes, yes it is.
Dont you guys have better things to do than sit here and talk sh!t, I mean for real..Walgreens is having a sale on KY maybe you to should meet for lunch.
Thinker said: "This has led me to believe that the coming real estate collapse has not yet begun in earnest, and the present slowness is nothing but a precursor. News of the slowdown has not yet filtered through the great masses of people, and it will not likely do so for some time to come, but when it does, things will get plenty ugly plenty fast."
I really agree with you on that one. Yesterday, I was analyzing sales in the tax records, and at the lower end, they're still flipping and raising prices, while the middle is languishing, and the high end has almost flat lined. One of our Southern Maryland counties had a 44% YOY decline and press was disinterested in reporting it when I spoke with them...
By the way Thinker, my brother makes 80k per year. He has 650k first loan, and a 200k heloc. This is for a 5,000SF house with one kid. He's just now starting to say "you know, maybe we should sell this place, it's starting to get expensive every month!"
I was thinking of inviting Casey Serin over to see if he wants to take it off his hand...
Borks Bitch this is your mama speaking, please call me, or please stop by when you have a chance...I need my streach mark loofed!
Hey Bork,
Why do you have to be so disgusting. Keith I say ytou kick Borkafatty and Borks my Bitch off of HP. They both make my stomach sick. And my son who is 12 reads this site. Come on guys it's time to boot this trash from our great site.
Hey Bork,
Why do you have to be so disgusting. Keith I say ytou kick Borkafatty and Borks my Bitch off of HP. They both make my stomach sick. And my son who is 12 reads this site. Come on guys it's time to boot this trash from our great site.
------------
I did not do a dam thing...those morons are the ones talking smack...and if you let your 12 yearold read this material shame on you! Life is stressfull enough for children never mind the doom and gloom.
Patch Tuesday,
92% of the sheeple are still in denial. To bad they actually believe we have hit bottom already. Wow are they going to get cloberred next year. HD to housing is like Auto Dealers to the car industry it just does not lie. Next year is going to be beyond painful. Reason being sheeple are way over their head in debt and don't even realize it.
and if you let your 12 yearold read this material shame on you!
Hey Keith,
Bork is definetely not stable. Of course I let my 12 year old read this. I want him to understand the economic phases so he can buy at the bottom. That is why my oldest daughter bought a house in the early nineties. Children need an economic education. So Keith once again please clean up your site and boot these trash.
hd now UP 2.5%!!!!! The worst is behind us. Another wrong prediction from Keith who doesn't understand that wall street looks 2 years ahead and could care less about what is occuring today.
LOL, all the homebuilders are way up. I wonder if Jim Cramer's lemmings are running with them.
Hey Keith,
Bork is definetely not stable. Of course I let my 12 year old read this. I want him to understand the economic phases so he can buy at the bottom. That is why my oldest daughter bought a house in the early nineties. Children need an economic education. So Keith once again please clean up your site and boot these trash.
-----------------------
I want him to understand the economic phases:
HAHAHA! now that is funny!!
No offence there but umm if you call this site a place for sound economics..you and him need to get more reading material at your local library.
hd now UP 2.5%!!!!! The worst is behind us. Another wrong prediction from Keith who doesn't understand that wall street looks 2 years ahead and could care less about what is occuring today
0-----------0
This must be that sound economics training the above anono is preaching to her 12 yearold.
the Philadelphia home builder index is up 3.1% as I type this
the weaker the individual stock, the more it is up today, lead by WCI, up almost 13%
Centex, hasn't filed financials for a couple of quarters now, up almost 4%
KB Homes, CEO just resigned in options dating scandal, up 5.3%
DH Horton, released terrible earnings this morning, up over 9%
related retailed Home Depot, missed estimates this morning, says can't see end to downturn..it's up 3%
----
this is what we're up against as rational investors
“Uranium prices have recently gone ballistic…”
http://tinyurl.com/yldpcx
quite interesting...but ehh who wants to make money...
Keith my man...You do damn well with housing, but sometimes you Stock Market "foreseeing" can be a bit off...HD is going through restructuring and adding new marketing and products that will see it back in the 40.00s. They know people who can not sell their homes are going to have to 1.Stay in them (make them more comfy). 2. Spend more money on upgrades to make them more attractive. 3.Buyer going to buy smaller more affordable homes and fix them up with upgrades. 4. Foreclosures will have to be made pretty by their new buyers after auction. It is lowes who pretty much placed most of their stores in highend/new development markets who will take an @$$ beating....
Home Depot stock up 2.88% today. Thank for the "genius" prediction dipshit.
http://tinyurl.com/y3t78o
hey anono you want your son to have sound economic training? have him read this...
this is where we are headed..he best stick to GIJoe or the playstation games, cause where we are headed he will be happy just to have the electricity on or heat in the house..we are only going to be bailed out for so long...forget what these lame asses are saying about the stock market..smoke and mirrors, no true investments funny money printed out of thin air. The real money is already out of the system..speculation..and plunge protection thats all it is..a patch to a much bigger problem.
HD isn't in the new home construction biz as much as other local lumber players.
They dominate the DIY and small/med home improvement markets. The product profit is near 100%. HD is a very well run company. The stock went up today. I don't own, nor would I buy. I should have bought when they went public in Atlanta. I saw my first store in Atlanta 15-20 years ago. Unbelievable story.
11-14-2006 4:02PM ET
HOME DEPOT INC (NYSE:HD)
Last Trade: 37.96 +1.56 (4.29%)
==> HD got slaughtered????
==> keith, u r a freaking idiot
==> need to get your head examine
==> u lost all credibilities
All you anonys bashing Keith for the HD call are a bunch of idiots. There is no fundamental reason why HD or the HB's would have a great day today other than the Street's inane belief that the Fed will pause and/or lower sometime soon
and this will be a great boon for the HB's(?!?) Lower rates now mean nothing good.
In reality, the trade deficit is shrinking and the Core PPI is going lower because the GDP is going lower. This is not a good thing!!! All of this + the action in the bond market equals one thing
and one thing only: recession dead ahead. I guess it's possible it could mean something else as well: depression dead ahead.
There is no possibility that HD or any of the HB's will have anything remotely similar to a good year in 2007 or 2008 or 2009, etc. Stock prices will EVENTUALLY reflect a deflation scenario, as the bond market (which is many times larger) is rightfully doing.
Yeah, but the stock price was up by $1.56 per share at the end of trading today. It's hard to make money going short the market. Probably some straddles made money, but that's hard to figure.
Clearly a pump and dump in action. No reason why these stocks should be up - bad news abounds.
missed sales
missed earnings
put out a dismal future forecase
ceo said he didn't know where bottom was
stock jumps at end of day
market is fixed
wow.
got the call right on the company and got the market manipulation wrong
someone explain to me after today's news how this stock rallied at the close
fed's remarks? manipulation?
"Home Depot sales drop 50%" - if they announced that, would stock rally?
amazing
"There is no possibility that HD or any of the HB's will have anything remotely similar to a good year in 2007 or 2008 or 2009, etc. Stock prices will EVENTUALLY reflect a deflation scenario, as the bond market (which is many times larger) is rightfully doing."
YES, AND YOU ARE QUEEN OF ENGLAND!
So you are saying that there is a possibility that the HB's will have a good year? Somebody's not taking their medication. :-)
Everyone that is ridiculing Keith for the HD call, why don't you back up your truck and load up a thousand shares for yourself. Show us how it's done!
Oh, I forgot. You can't do that as you have all your money invested in that house you're going to flip when the price goes up!
Kieth
You are the Shoe Shine Boy
Keith,
Why did HD stock go higher? Because you are not the only person to believe they were going to have bad results, so the bad results were already factored into the price, because everyone already knew.
The fact that you actually put that out there as a "prediction" when everybody and their mother knew they were going to have poor sales shows what an intellectual impostor dipshit you are.
Home Depot stock is up today big. HP discreditied once again. Stop with your predictions Keith, most are wrong making you look the fool
"4th quarter will be brutal on profits as they slash prices at wal-mart:"
priced into the stock already Keith
short at your own risk.
Even stranger, LOWS shot up because Berkshire Hathaway increased their position.
I guess Cramer was right about Lowe's bottoming.
These stocks, and the homebuilders are going up because people think they have bottomed. Just look at the PE on some of those homebuilders, less than 5.
I don't think they have bottomed at all. Future earnings for most are big negative numbers.
Both China and the Saudis can extort us.
The Chinese want us to leave Iran alone, and their announcement about diversifying out of dollars was a veiled threat.
The Saudis don't want us leaving Iraq for fear the entire region will descend into mayhem. They can play the oil card.
What's a decadent, late state capitalist empire to do?
We'll soon find out.
Current market action has totally diverged from reality, and the last time this happened it was late in the 2000 dot com bubble. When every piece of news is regarded as bullish by wall street, something is going to happen, and it is usually a large correction to the downside. Today we saw Home Depot miss earnings, have seen the homebuilders put out terrible numbers and say they have no idea when things will get better. The fed head Poole comes out and says rates will remain steady (surprised?). I have a simple question when you watch the stock market action lately, and the answer will tell you how to prepare for the market going forward:
All data says that housing is nowhere near bottom, the economy is slowing, and retail is slowing down. The question is, how does any of this fit a model that would be "good" for stocks going forward? There is of course no good answer, and that is what the bond market is screaming. Time will tell, and soon enough I imagine.
Hey Keith genius, how much money have you lost shorting HD so far? Up over 6% since this "as predicted" post.
Hilarious!
HD though down in the AM...is starting it's afternoon run up...Remember boys and Ladies, HD did not become the powerhouse it did selling lumber to the home builders of McManssions...It made did it by selling the simple things such as lighting, plugs, etc...things that you need to replace over the wear and tear of your home. Most HD are located in areas that have homes 40 years old or more. They will do fine, in fact they might do better than they did doing the housing boom because since the homes were new, most were hitting HD for superfical items such as garden and trim paint. Because people have to stay, fix, or improve their current homes, they will hit the HD to do such. It is LOWES which is going to take the beating, not HD...
~BD
37.77@2:25pm
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