Home Depot's Orange Outlook

Home improvement bellwether Home Depot's third-quarter earnings were better than expected, mostly due to lower expenses.

"There is still a great deal of pressure in the housing and home improvement markets, though there are some positive signs of stabilization," said Chairman and Chief Executive Frank Blake.

CFO Carol Tome said that Big Orange did gain market share in some areas, particularly appliances, paint, electrical and lumber products.

It's no coincidence that these four areas represent some of the cheaper projects that home owners, either prepping their homes for sale or accepting that they aren't going anywhere. A fresh coat of paint or a new dishwasher are savvy improvements, and even a new deck can be fairly cost-effective.

Hurricane season has also been relatively light, so that means less demand for plywood and other products associated with repairs.

Home Depot also indicated they may increase their stock buyback and their dividend, generally a sign that they are less interested in capital intensive moves like acquisitions where they'd need that cash.

Home Depot has generally done better than rival Lowe's in the downturn, which posted a 30 percent drop in quarterly profit on Monday.

Both Home Depot and Lowe's are no doubt hoping that the extension and expansion of the home buyer credit will pay dividends next spring.
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