The company, which opened 49 stores in the third quarter, earned$716 million, or 46 cents a share in the three months ended Nov. 3,reflecting an increase from the $646 million, or 40 cents a share,earned in the same period a year earlier. Revenues for the quarterwere up 5.8% to $11.2 billion but sales at stores open at least ayear fell 4%, the company said.

"The combined effects of a slowing housing market in parts ofthe US, significant deflation in certain commodity categories, anda difficult comparison to last year's hurricane recovery andrebuilding efforts have created a challenging sales environment forhome improvement," Robert A. Niblock, Lowe's chairman, presidentand CEO, says.

The company, which operates 1,330 stores in 49 states, also cutits forecast for the fourth quarter and full year, saying itexpected the soft housing and home improvement market wouldcontinue into 2007. The Mooresville, NC firm said it expects a 4%to 6% drop in same-store sales for the fourth quarter and anoverall profit for the quarter of between 36 cents and 38 cents ashare. Company executives say they anticipate a full-year profit of$1.95 to $1.97 per share, below the $2 to $2.07 a share itpredicted in September. Analysts had expected a profit of 41 centsa share in the fourth quarter and $1.97 a share for the year.

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