Best Buy: Quarter better than expected

Best Buy's fourth quarter was better than anticipated even though profits were down from a year ago amid an economic downturn. The company also noted that the quarter ended stronger than it began, indicating that consumer spending stabilized. And the Circuit City liquidation certainly didn't hurt Best Buy's cause.

The company reported net income of $570 million, or $1.35 a share, on revenue of $14.7 billion. In the same quarter a year a year ago, Best Buy reported net income of $737 million, or $1.71 a share, on revenue of $13.4 billion. Excluding restructuring charges, Best Buy reported earnings of $1.61 a share, well ahead of Thomson Reuters estimates of $1.40.

Same store sales, however, fell 4.8 percent in the quarter, which ended Feb. 28. Best Buy had cut its outlook, revised it, and restructured to prepare for the downturn. The company said it cut its inventory more than it had expected and faced product shortages late in the quarter.

For fiscal 2009, Best Buy reported earnings of $2.39 a share, down from $3.12 a share in fiscal 2008. Fiscal 2009 revenue was $45 billion, up from 13 percent a year ago. For the year ahead, Best Buy projects earnings of $2.50 to $2.90 a share on revenue of $46.5 billion to $48.5 billion. The company also projects same store sales to be flat to down 5 percent for the year. Analysts were expecting earnings of $2.45 a share.

In a statement, Best Buy executives portrayed the year ahead as one focused on cost-cutting and a rocky economy. However, the company should benefit from the liquidation of Circuit City. A negative factor is likely to be increased competition from Wal-Mart, which is increasingly focused on electronics. Best Buy estimated that its market share improved to almost 22 percent.

Best Buy CFO Jim Muehlbauer said:

We expect consumer spending to remain challenging in fiscal 2010, and the complex mix of external factors that will influence their behavior makes forecasting the future increasingly difficult.

Best Buy's breakdown of sales showed a few interesting cross currents. For instance, consumer electronics sales fell 8.6 percent and entertainment software fell 11 percent. Home office equipment surged 8.1 percent in the fourth quarter and notebook PC sales showed small gains.

(Credit: Larry Dignan/ZDNet)

[whattheF]

so, the 'price match' policy is actually working to push up profits huh ?

[biffhenerson]

No surprise to me. Things ARE better than the media and Obama want you to beleive. The Obama administration is pushing its doom and gloom propaganda so they can force through their wild and out of control spending to all of us taxpayer suckers. It is of no surprise that the hard numbers of our recovery will continue to disagree with the propaganda. Good job Best Buy!

[TaxmanCDN]

So, what else was on Fox news today?

[badasscat]

Huh? Obama has been saying since he was elected that we're in the process of a turnaround, in no small part due to the programs pushed by himself and his administration that were fought every step of the way by the Republicans who got us in this mess in the first place. I think you're confusing realism and pragmatism with "doom and gloom". It's the Republicans who have said they want Obama's policies to fail, Obama's not the one who said that. That's doom and gloom.

[biffhenerson]

Obama "says" alot. He is a slick, smooth, talker thats for sure. Republicans did not get us into "this mess". Prior administrations over the years did. Of which Obama was an active member. The record is clear that the relaxed housing/loan/credit policy was from Clinton's team. Reguardless, Obama has had his fingers in the pie over the years. He is to blame along with the others. The Republicans have not said that they want Obama's policies to fail. A radio talk show host said that. But he says alot of wacky things that are part of his entertainng show. I'm the one that used the terms "doom and gloom". It is how I describe the medai and the fear that Obamas adminstration promotes to keep people on the defensive. Oh things may look artifically good in the comming months but inflation is going to bring it all down in a year or so.