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Best Buy Shares Plummet as Q3 Earnings Miss the Mark (BBY)

Electronics retailer Best Buy Co., Inc. ( BBY ) on Tuesday posted a 13% drop in fiscal third quarter earnings, missing analyst estimates and sending its shares plunging in premarket trading.

The Richfield, MN-based company reported fiscal 2012 third quarter net income of $154 million, or 42 cents per share, down from $217 million, or 54 cents per share, in the year-ago period.

Revenue edged slightly higher from last year to $12.01 billion.

On average, Wall Street analysts expected a much higher profit of 52 cents per share, on larger revenue of $12.13 billion.

Looking ahead, the company said it expects full-year 2012 profit margins to fall by around half a percentage point from last year, and that same-store sales would be flat to down 3%. Same-store sales are an important metric used to measure a retailer's performance, since they only count stores open at least one year.

Best Buy shares fell $2.54, or -9%, in premarket trading Tuesday.

The Bottom Line

Recent optimism that "Black Friday" sales would fall to the bottom line did not pan out. Shares of Best Buy ( BBY ) have a 2.28% dividend yield, based on last night's closing stock price of $28.07. The stock has technical support in the $23-$25 price area. If the shares can firm up, we see overhead resistance around the $30 price level.

Best Buy Co., Inc. ( BBY ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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