Lowe's Falls After Announcing Lower-Than-Expected Forecasts For Q2

The second largest US home improvement chain, Lowe's Cos Inc LOW, have slid more than 3% in pre-market trading, despite reporting stronger-than-anticipated results for its fiscal first quarter. The main reason that is pulling down the company’s stock is the sluggish quarterly outlook. LOW reported a 2.7% increase in its net income, which rose to $489 million, or 34 cents a share, for the quarter ended April 30, from $476 million, or 32 cents a share, a year ago. Analysts were expecting the company to record a profit of 31 cents a share. Meanwhile, sales rose 4.7% to $12.39 billion, exceeding the Street view of about $12.25 billion. LOW’s sales at stores open at least a year moved up 2.4%. Chief Executive Officer Robert Niblock said in a statement “While we are optimistic we will experience solid demand through the balance of the year, we view 2010 as a year of transition for our industry.” In keeping with the sentiments conveyed by the CEO, Lowe’s projected its earnings for the second quarter at $0.57-$0.59 a share, which was significantly short of the analyst expectations of $0.62 per share.