NEW YORK, USA – Home Depot’s first-quarter net income rose 18 per cent, thanks to the ongoing housing recovery, despite a chilly and wet spring.

Its quarterly results topped Wall Street expectations, and the world’s biggest home improvement chain boosted its full-year earnings and revenue forecasts yesterday. Shares rose nearly two per cent in midday trading.

Home Depot, which operates 2,257 stores, and other retailers are enjoying easing pressure as the housing market slowly improves.

“While weather negatively impacted our seasonal and exterior businesses, our core interior project business remained strong throughout the quarter,” said CEO Frank Blake. “This was encouraging and consistent with the views that the housing market is starting on the path to recovery.”

For the three months that ended May 5, Home Depot earned US$1.23 billion, or 83 cents per share. That’s up from US$1.04 billion, or 68 cents per share, a year earlier. Analysts predicted earnings of 76 cents per share, according to a FactSet survey.

Revenue for the Atlanta company rose seven per cent to US$19.12 billion from US$17.81 billion. Wall Street expected US$18.62 billion.

The company has been improving its online business, and during the quarter completed its rollout of a program that lets shoppers buy online and have items shipped to a local store.

“So far, the growth we’ve seen from this has been ahead of our expectations, and one out of five customers who pick up an order at the store also buy some additional items while there,” Blake said.

Revenue at stores open at least a year, a key gauge of a retailer’s health, climbed 4.3 per cent. This figure excludes results from stores recently opened or closed.

Total transactions rose one per cent. Purchases under US$50, which represent about 20 per cent of US revenue, were down 1.6 per cent, mainly because of fewer purchases in its garden business. Purchases over US$900, which also represent about 20 per cent of US business, rose 9.7 per cent in the first quarter, helped by strength in appliances and continued improvement from the company’s business with professional contractors.

The chain anticipates fiscal 2013 earnings of US$3.52 per share, with revenue up about 2.8 per cent. Its prior guidance was for earnings of US$3.37 per share, with revenue rising about two per cent. The revised outlook implies revenue of US$76.83 billion, based on 2012’s US$74.75 billion.

Analysts expect full-year earnings of US$3.54 per share on revenue of US$76.98 billion.

S&P analyst Michael Souers raised his target price by US$7 to US$62 for the stock. But he reiterated his “Sell” rating.

“Despite continued expected improvement in housing, we caution that refinancing activity would likely slow should interest rates rise, hurting remodeling,” he said.

Shares rose US$1.63, or 2.1 per cent, to US$78.39 during midday trading. The stock has traded between US$47.68 and US$79.36 during the past 52 weeks.