Home Depot Inc. still sees room for profit growth this year as consumers take up long-delayed maintenance and repair projects for their homes.

The company posted a higher-than-expected quarterly profit and raised its full-year earnings forecast Tuesday, helped by cost controls. While sales missed expectations in a weak economy, investors were relieved that the top home improvement chain still expects an increase for the rest of the year.“We come in looking at these numbers and think that … things really did not fall apart,” said Thomas Villalta, a portfolio manager at the Jones Villalta Opportunity Fund in Austin, Texas, which owns Home Depot shares. He applauded the company’s performance amid macroeconomic pressures.

Home Depot’s results echoed those of rival Lowe’s Cos., which reported Monday. Shares of both rose for the second straight day on hopes that are poised to grow once consumer sentiment perks up.

While both chains have yet to see demand for expensive home projects such as special-order kitchens, they have benefited from U.S. consumers selectively spending on repairs and replacing appliances with energy-efficient ones.

Home Depot plans to focus on cheaper products including faucets, paints and simple flooring to drive traffic as it sees limited room for “ticket growth” in the weak sales climate.

In an interview, Chief Financial Officer Carol Tome told Reuters that a recovery in demand for expensive renovations depends on the economy. That said, she sees little chance of a double-dip downturn in the U.S. economy.

“I don’t think there is a double dip looming … But it sure is sluggish,” Tome said by phone.

“As uncertain as the economic climate is, we are seeing our business return to sales growth and the hardest hit parts of the country start to stabilize,” Chief Executive Frank Blake had said on a conference call.

Blake pointed out that 70 percent of the company’s top 40 U.S. markets reported same-store rises in the second quarter, with key markets such as Florida and California performing in line with the company average.

Home Depot’s net income rose to $1.2 billion, or 72 cents a share, in the second quarter ended Aug. 1 from $1.1 billion, or 66 cents a share, a year earlier.

Analysts on average were expecting 71 cents a share, according to Thomson Reuters I/B/E/S.

Sales rose 1.8 percent, to $19.41 billion, missing the average estimate of $19.59 billion.

Home Depot forecast earnings of $1.90 a share from continuing operations for the current fiscal year, up 2 cents from its prior outlook. For the prior year, it reported profit of $1.66 a share from continuing operations, before charges.

The company expects sales growth of about 2.6 percent, down from a prior view of 3.5 percent.

Home Depot is implying a 2 percent same-store sales gain for the second half of 2010, similar to that of Lowe’s, JPMorgan analyst Christopher Horvers said.

“The top-line guidance should relieve concerns that its competitor (Lowe’s) was being too aggressive on its sales forecast and supports our view that modest comps (modest increases in comparable-store sales) are achievable based largely on repair and maintenance spending,” Horvers added.

Sales at stores open at least a year rose 1.7 percent globally. UBS analyst William Truelove had expected an increase of 3.5 percent, while Wall Street on average had forecast growth of 2.3 percent, according to an early note.

Same-stores sales rose 1 percent in the U.S., the company’s main market. Lowe’s, which has few stores outside the U.S., posted a 1.6 percent increase for its latest quarter.

Home Depot shares rose $1.30, or 4.7 percent, to $28.68 Tuesday, while Lowe’s gained 45 cents, or 2.3 percent, to $20.15.