(Reuters) - No. 2 U.S. home improvement chain Lowe's Cos Inc gave a lackluster outlook for the current quarter despite strong fourth-quarter results, and its shares fell.

The company, which recently laid off about 1,700 middle managers across the United States, expects first-quarter earnings of 34 cents to 38 cents a share, while analysts were expecting 38 cents a share.

It expects its same-store sales to be about flat and operating margin to decrease 10 to 20 percentage points.

The news came a day after larger rival Home Depot Inc reported strong quarterly results and raised its profit forecast for the year.

"While uncertainty in the market remains, the economic recovery is continuing," Chief Executive Robert Niblock said in a statement.

Net income at Lowe's rose to $285 million, or 21 cents a share in the fourth quarter, from $205 million, or 14 cents a share a year ago. Analysts, on average, were expecting 18 cents a share, according to Thomson Reuters I/B/E/S.

Sales rose 3.1 percent to $10.48 billion, above the analysts' estimate of $10.45 billion. Sales at stores open at least a year rose 1.1 percent.

Its shares were down 31 cents, or 1.1 percent, at $25.68 in thin premarket trading.

(Reporting by Dhanya Skariachan; additional reporting by Nivedita Bhattacharjee; Editing by Joyjeet Das and Derek Caney)

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