Best Buy sales fall below views; dividend raised

Consumer electronics retailer Best Buy saw its stock fall Wednesday after reporting an unexpected decline in holiday-quarter sales

In its fourth quarter, the company posted higher profit, above market view, while revenues missed estimates with lower comparable sales. Eight analysts surveyed by Zacks expected $13.61 billion.

Wall Street was expecting revenue of $13.62 billion on earnings of $1.67 per share.

For the quarter ended January 28, Best Buy earned $607 million, or $1.91 a share, up from $479 million, or $1.40 a share, a year ago.

In order to execute the two-year $3 billion share repurchase plan, the board of directors approved a new $5 billion share repurchase authorization for the company's common stock, superseding the existing authorization dated June 2011 which had $2.2 billion in purchases remaining.

Best Buy (BBY) came up light in the trousers in some areas of its latest earnings report, and Wall Street is pummeling the red-hot stock.

Looking ahead, Best buy expects to report Q1 EPS in the range of 35 cents to 40 cents, compared with 49 cents expected by Wall Street.


Best Buy shares have risen slightly more than 3 percent since the beginning of the year, while the Standard & Poor's 500 index has increased nearly 6 percent.

In Best Buy's much smaller global segment, revenue increased 2.5%, driven by growth in Mexico.

Adjusted net earnings were $621 million, compared to $524 million previous year. It also forecast a drop in same-store sales - at locations open for at least one year.

During the key holiday season, Best Buy more than held its own against rivals in a heavily promotional environment, but nonetheless saw US comparable sales fall 0.9%, a disappointing number partly mitigated by a strong 17.5% increase in online stores. Excluding items, earnings came in at $1.95 per share, which beat analyst estimates of $1.67 per share.

The company said revenue was $13.48 billion in the quarter ended January.

Best Buy's net revenue fell 1 percent to $13.48 billion in the three months ended January 28, missing the average analyst estimate of $13.62 billion, according to Thomson Reuters I/B/E/S. As a percentage of total online revenue increased 300 basis points to 18.6% versus 15.6% past year.

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