Lowe's CEO says Rona would be 'good fit'

The CEO of U.S. home improvement retailer Lowes, Robert Niblock, said Monday that an acquisition of Quebec-based Rona would be a good fit with his firms plans to increase its international scope.

Niblock, in a conference call with analysts, did not directly mention the controversy over his firms $1.8-billion offer for Rona, made on July 31.

But he did allow that splitting Lowes management into U.S. and international teams could be a possibility.

Niblock said Lowes recognizes that "market and cultural differences" require different approaches.

Rona has rejected the offer, which has become an election issue in Quebec. The provincial government has said it opposes having the company fall into foreign hands.

Niblocks comments came as Lowes posted a 10 per cent drop in second-quarter net income, hurt by a timing shift and a charge tied to job cuts. Its performance missed Wall Street's expectations.

The firm also lowered its fiscal 2012 earnings and revenue outlooks.

Lowes Cos. earned $747-million US, or 64 cents per share, for the period ended Aug. 3. Thats down from $830-million, or 64 cents per share, a year ago.

Fiscal 2012 has one less week than last year. The timing shift lowered earnings by about 3 cents per share. Removing a charge tied to previously announced job cuts and the impact of the timing shift, earnings were 68 cents per share.

Revenue fell two per cent to $14.25-billion from $14.54-billion. Lowes said that the timing shift accounted for 1.8 percentage points of the decline.

Analysts polled by FactSet expected earnings of 70 cents per share on revenue of $14.44 billion.