(RTTNews) - Home Depot Inc. (HD: News ), the world's largest home improvement retailer, on Tuesday posted a decline in third-quarter profit, reflecting bleak housing and home improvement markets as consumers continue to scale back on spending in light of the volatile economic environment. Further, the specialty retailer updated its earnings forecast for the full year, citing some positive signs of stabilization in the housing market.

Q3 Results

The Atlanta, Georgia-based company's third-quarter net income was $689 million or $0.41 per share, a decline of 8.9%, compared to $756 million or $0.45 per share in the year-ago quarter.

On an adjusted basis, non-GAAP net income dropped to $695 million from $760 million in the same quarter of last year.

On average, 28 analysts polled by Thomson Reuters expected the company to post earnings of $0.36 per share. Analysts' estimates typically exclude special items.

Quarterly net sales totaled $16.4 billion, 8.0% lower than the previous year's net sales of $17.8 billion, but surpassed the $16.27 billion revenue consensus estimate of twenty-four analysts polled by Thomson Reuters.

Comparable store sales for the latest quarter were negative 6.9%, with 7.1% decline in sales for U.S. stores.

Frank Blake, chairman and CEO of Home Depot, said, "There is still a great deal of pressure in the housing and home improvement markets, though there are some positive signs of stabilization. Our business continues to perform well in a difficult environment. We grew market share in the quarter, continued to transform our business and improved customer service."
Year-To-Date Highlights

For the nine-month period, the company reported net income of $2.32 billion or $1.37 per share, compared to $2.31 billion or $1.37 per share in the prior-year period.

Adjusted non-GAAP net income for the period was $2.41 billion or $1.42 per share, compared to $2.67 billion or $1.58 per share in the corresponding period of last year.

Net sales for the nine months ended November 1, 2009 declined 9.0% to $51.6 billion from $56.7 billion reported in the comparable period of the previous year.

FY09 Forecast

Given the year-to-date performance, Home Depot updated its fiscal 2009 earnings guidance, currently projecting earnings from continuing operations of about $1.50 per share, up 9.5% from fiscal 2008. On an adjusted basis, the company now expects earnings from continuing operations of about $1.55 per share for 2009, down 13% from the previous year. Annual sales for fiscal 2009 were still expected to be down about 9%. Analysts are projecting earnings of $1.52 per share on revenues of $65.27 billion for the full year.

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