Surry Business

Lowe’s Companies Inc. (NYSE: LOW), the world’s second-largest home improvement retailer, this week reported net earnings of $643 million for the quarter ended Nov. 2, 2007, a 10.2 percent decline over the same period a year ago.

Diluted earnings per share fell 6.5 percent to $0.43 from $0.46 in the third quarter of 2006.

For the nine-month period that ended Nov. 2, 2007, net earnings declined 3.7 percent to $2.40 billion while diluted earnings per share dropped 0.6 percent to $1.58.

Lowe’s said the good news is that “our ongoing commitment to maintain a safe shopping and working environment resulted in improved claims experience which led to a $112-million reduction in self-insurance liabilities for workers compensation and general liability claims. The change increased diluted earnings per share by approximately $0.05.”

Sales for the quarter rose 3.2 percent to $11.6 billion, up from $11.2 billion in the third quarter of 2006. For the past nine-month period, sales increased 3.8 percent to $37.9 billion.

Comparable-store sales declined 4.3 percent for both the third quarter and first nine months of 2007.

“Our sales for the quarter fell short of our expectations, but disciplined expense management and ongoing safety initiatives combined with rational and targeted promotions enabled us to deliver earnings per share at the low end of our guidance,” said Robert A. Niblock, Lowe’s chairman and CEO. “Many external factors contributed to the weak sales environment, including a continuing housing correction, drought conditions in several U.S. markets, and slower than expected sales in Gulf Coast markets.

“Clearly the largest of these impacts was the unstable housing environment evidenced by an even steeper decline in housing turnover, falling home prices in many markets, and a near record inventory of homes for sale. Despite these factors, Lowe’s continues to gain market share according to third party estimates.

“The home improvement consumer remains pressured by the ongoing housing correction, tighter credit standards in the mortgage market, and rising financial obligations, but we believe our guidance for the fourth quarter
reflects these factors and is appropriately conservative given the uncertainties that exist.

“Pressures on our industry are likely to continue well into 2008, but we remain committed to our goal of providing great products and unmatched customer service and capitalizing on opportunities to ensure we gain profitable market share regardless of the level of industry growth.”

Lowe’s opened 40 new stores during the quarter. Lowe’s now has 1,464 stores including two in Surry County: Lowe’s of Elkin at 492 CC Camp Road and Lowe’s of Mount Airy at 692 S. Andy Griffith Parkway.