Home Depot revises 2007 guidance

NEW YORK (CNNMoney.com) -- Home Depot on Monday revised its full-year guidance, saying it now expects annual profits to decline less than expected, citing completion of a tender offer and an extra selling week in the year.

The Atlanta-based No. 1 home improvement chain, whose sales and profits this year have been walloped by the turmoil in the housing and credit markets, said its fiscal 2007 profits from continuing operations are expected to decline 7 to 9 percent.

Home Depot (Charts, Fortune 500) shares traded higher on the New York Stock Exchange.

Prior to the completion of of its Dutch Auction tender, the retailer has estimated a full-year profit decline of between 12 to 15 percent.

Earnings tracker Thompson Financial expects Home Depot's profit to fall 16 percent to $2.37 a share for the year.

With the completion of tender, Home Depot accepted for purchase 289,331,314 shares of its common stock at a price of $37 a share for a total cost of $10.7 billion, excluding fees. These shares represent 14.6 percent of the shares outstanding on Aug. 31, the company said.

For the purpose of computing diluted earnings per share, Home Depot projects that outstanding shares will be reduced by approximately 165 million and 290 million shares in the third and fourth quarters , respectively.

Separately, the retailer said its prior profit outlook reflected 52 selling weeks. However, Home Depot said this year will have 53 weeks of operating results that will add approximately three cents to its consolidated earnings per share guidance for the year.

The company competes in the home improvement market with Lowe's Companies Inc. (Charts, Fortune 500)