Best Buy drops 18 percent following dismal 3Q
Richfield, MN, United States (AHN) – Best Buy fell the most in eight years on Tuesday, after the largest electronics retailer in the nation reported dismal earnings for the third quarter.
Shares dropped as much as 18 percent, the biggest since Aug. 8, 2002. The Minnesota-based company earlier in the day posted quarterly earnings that missed expectations.
Earnings for the quarter ended Nov. 27 declined to $217 million, or 54 cents a share, from $227 million, or 53 cents a share, from the same period last year.
Sales slipped 1.1 percent to $11.9 billion, with only the home office category showing some life in the domestic market with a 4 percent rise.
U.S. revenue from consumer electronics fell 3 percent to 36 percent and those from entertainment software were down 15 percent. Total comparable store sales in the United States decreased 5 percent.
Performance abroad was slightly more upbeat. Sales from consumer electronics rose 1 percent, while the home office business increased 2 percent. Total international revenue grew 2.3 percent from a decline of 7 percent in the same quarter last year.
Best Buy said it expects domestic revenue to remain low. It downgraded its earnings forecast for the full fiscal year of 2011 to $3.20 to $3.40, from $3.55 to $3.70.
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