No Holiday Cheer for Best Buy. Stock Plunges.

By: By Aaron Smith, CNN staff writer
By: By Aaron Smith, CNN staff writer

NEW YORK (CNNMoney.com) -- Best Buy's stock plunged in pre-market trading on Tuesday after the retailer reported sales and earnings for the quarter which includes Black Friday that missed Wall Street's estimates. The company also lowered its guidance.

Best Buy reported that revenue totaled $11.89 billion in the third quarter, which ended on Nov. 27. That's a decline from $12 billion during the same quarter a year ago. It also fell short of expectations from analysts, who had forecast $12.45 billion, according to a consensus from Thomson Reuters.

Best Buy's stock fell about 13% prior to the opening bell.

Best Buy's dismal performance was in spite of an overall nationwide rise in retail sales. The Commerce Department reported on Tuesday that retail sales rose 0.8% in November.

"Best Buy was not effective promotionally around Black Friday," said Colin McGranahan, analyst for Sanford C. Bernstein.

As a result, he said the retailer was unable to take advantage of a "shift towards online sales in consumer electronics."

Best Buy also reported diluted earnings per share of 54 cents for the third quarter. That's an increase of one cent from the same quarter last year. But it was significantly lower than analysts' estimates of 61 cents per share.

The company lowered its guidance for the fiscal year to a range of $3.20 to $3.40 a share, compared to its previously announced guidance of $3.55 to $3.70. Analysts had been forecasting a profit of $3.59 a share.

Best Buy said that its same-store sales dropped 3.3% for the quarter, compared to a gain of 1.7% in the year-ago quarter.

The-CNN-Wire/Atlanta/+1-404-827-WIRE(9473)
TM & © 2010 Cable News Network, Inc., a Time Warner Company. All rights reserved.


Comments are posted from viewers like you and do not always reflect the views of this station.
powered by Disqus
631 SW Commerce Pl. Topeka, Kansas 66615 phone: 785-272-6397 fax: 785-272-1363 email: feedback@wibw.com
Copyright © 2002-2014 - Designed by Gray Digital Media - Powered by Clickability 111847194 - wibw.com/a?a=111847194
Gray Television, Inc.