China considers same tax rate for domestic, overseas firms (AFP)
AFP - Chinese lawmakers have mulled a draft law that would impose a 25 percent income tax on both domestic and foreign firms, eliminating the preferential rate for overseas companies, according to state media.
Lowe's profit tops Wall St (Reuters)
2008.08.19By Karen Jacobs 32 minutes ago
ATLANTA (Reuters) - Retailer Lowe's Cos (LOW.N) reported a higher-than-expected quarterly profit on Monday as U.S. consumers spent tax rebate checks on spring projects, but it forecast third-quarter results below Wall Street estimates.
Lowe's stock, which initially rose as much as 4 percent, was barely higher at mid-afternoon as the cautious outlook offset the strong second-quarter performance and market share gains.
"It was a very strong quarter," as Lowe's managed costs well, said Standard & Poor's Equity analyst Michael Souers. But he added, "it's not a strong outlook."
The second-largest home-improvement chain behind Home Depot Inc (HD.N) also raised its profit forecast for the year slightly.
Walter Todd, a principal and portfolio manager with Greenwood Capital in Greenwood, South Carolina, said that Lowe's full-year outlook could actually indicate a slower second half, given the stronger second-quarter results.
"They effectively lowered the guidance for the second half," Todd said.
Home-improvement retailers have posted weak results as consumers face a slumping U.S. housing market, tighter credit and rising gas and food costs.
The second quarter marked the fourth straight quarterly profit decline for Lowe's, while earnings at Home Depot have fallen for the last seven quarters.
Lowe's earnings fell 8 percent to $938 million, or 64 cents a share, for the quarter ended August 1, from $1.02 billion, or 67 cents a share, a year earlier. Analysts on average forecast earnings of 56 cents a share, according to Reuters Estimates.
Total sales rose 2.4 percent to $14.5 billion, higher than the $14.1 billion analysts expected, as consumers spent their U.S. government tax rebate checks on lawns and gardens.
SALES DROP LESS THAN EXPECTED
Sales at stores open at least a year, an important retail measure, fell 5.3 percent, hurt by weakness in big-ticket projects in areas hardest hit by the housing downturn. Some analysts had expected a same-store sales drop of as much as 9 percent.
"Lowe's bucked the trend of its linkage to housing turnover, as same-store sales recovered nicely at a moment when historical trends suggested they should have been troughing," Goldman Sachs analyst Matthew Fassler said in a research note.
Analysts are expecting Home Depot to report a second-quarter profit of 61 cents a share on Tuesday, compared with 77 cents a year earlier, according to Reuters Estimates. The industry leader has said per-share earnings could fall as much as 24 percent this year.
Lowe's said market share gains from competitive store closures helped its performance. Though Home Depot has closed some underperforming stores this year, Lowe's said much of its share gain came from independent retailers which went out of business.
"The further you get into the economic downturn, the more pressure that puts on less well-capitalized competitors," Lowe's Chairman Robert Niblock told Reuters.
Lowe's, based in Mooresville, North Carolina, said it now expects a full-year profit of $1.48 to $1.56 a share, compared with the $1.45 to $1.55 a share it forecast in May.
For the third quarter, Lowe's expects a profit of 27 cents to 31 cents a share.
Analysts expect a profit of 33 cents a share for the third quarter and $1.50 a share for the year.
Lowe's shares edged up 8 cents to $24.58 on the New York Stock Exchange, after rising as high as $25.47. Home Depot fell 70 cents, or 3.2 percent, to $26.83, also on the NYSE.
Lowe's stock has fallen about 9 percent in the past year, while Home Depot is down 19 percent.
(Editing by Dave Zimmerman, Richard Chang)
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