Home improvement retailer Lowe's Companies Inc. (LOW) reported a 17.4 percent growth in third quarter earnings after it controlled labor and other expenses in the housing slump.

Sales rose 1.9 percent, but came in below analysts expectations.

In addition, the company guided fourth quarter results in line with analysts forecasts. The company lowered its fiscal 2010 earnings outlook that came in below analysts guidance.

“Thanks to the dedication of our 238,000+ employees, we delivered solid results for the quarter despite the continued sluggishness of the economic recovery, said Chief Executive Robert Niblock.

Ongoing uncertainty in employment and housing continues to pressure our industry, but we are prepared to operate effectively in a slow-growth environment. We continue to solidify plans to enhance our market share gains as macro-economic factors slowly improve, said Niblock.

The Mooresville, North Carolina-based Lowe's earnings were $404 million or 29 cents a share, up from $344 million or 23 cents a share last year.

The latest quarter results included a charge related to an evaluation of the carrying value of long-lived assets, including two stores that closed on November 7, and the pipeline of potential future store sites, which reduced pretax earnings by $50 million or 2 cents a share.

Analysts polled by Thomson Reuters expected Lowe's to earn 30 cents a share for the third quarter.

Sales rose 1.9 percent to $11.59 billion, lower than analysts expectations of $11.75 billion. Comparable store sales increased 0.2 percent.

The company had expected third quarter earnings of 28 cents to 32 cents a share and sales growth of 3 percent to 5 percent. The company had projected comparable store sales growth of 1 percent to 3 percent.

Lowe’s has curbed staff costs by hiring more part-time, seasonal workers and using employees instead of outside contractors to clean and do plumbing and electrical repairs in stores, Bloomberg reported.

During the quarter, Lowe’s opened ten stores. Lowe’s operated 1,734 stores in the United States, Canada and Mexico as of October 29, 2010.

Looking forward into the fourth quarter, the company expects earnings of 16 cents to 19 cents a share and sales growth of 2 percent to 4 percent. Analysts expect profit of 18 cents a share on revenue of $10.47 billion with a 3 percent sales growth.

The company expects to open about 17 stores reflecting square footage growth of about 2 percent during the fourth quarter. The company expects comparable store sales to increase 0 percent to 2 percent. Depreciation expense is expected to be approximately $400 million.

For fiscal 2010, the company lowered its earnings guidance to a range of $1.37 to $1.40 a share from previous forecast of $1.38 to $1.45 a share. The company now expects sales growth of 3 percent to 4 percent and comparable store sales to increase 1 percent to 2 percent.

Previously, the company had expected sales growth of about 4 percent with comparable store sales rising about 2 percent. Analysts expect profit of $1.41 a share on revenue of $48.97 billion with 3.70 percent sales growth.

The company expects to open about 42 stores in 2010 reflecting total square footage growth of about 2 percent. Depreciation expense is expected to be about $1.60 billion.

Among others in the industry, The Home Depot, Inc. (HD) is expected to report third-quarter earnings on Nov. 16. Analysts expect earnings of 48 cents a share on revenues of $16.59 billion.

Shares of Lowe’s were trading down 0.83 percent at $21.51 in pre-market session on NYSE.