BBY 2009 Q4 Earnings - by BetterTrades

Before the opening bell on Thursday, the world’s largest seller of personal computers and other home office products, consumer electronics, entertainment software, major appliances and related accessories, Best Buy Inc. (BBY), announced that the company’s profits during the 4th quarter declined due to one-time charges.

For the recent period, Best Buy recorded net income of $570M, or $1.35 per share, compared to net earnings of $737M, or $1.71 per share from a year ago, a decrease in income of nearly 23%. The company’s bottom-line was affected by charges amounting to $0.26 per share. Excluding that, Best Buy would have posted quarterly earnings of $682M, or $1.61 per share, still almost 7.5% below last year’s 4th quarter results.

As for total sales, the company managed to increase year-over-year sales, from $13.42B to $14.72B, an increase of almost 10%. Analysts, in the meantime, were looking for the retailer to post quarterly earnings of $1.40 per share on overall revenues of $14.82B.

"We prepared for reduced consumer spending, and we were pleased when the quarter finished stronger than it began," announced CEO Brad Anderson early Thursday morning. Best Buy is in the process of handing the reins of the company over to COO Brian Dunn, who will be taking over for Anderson when he retires later this summer.

In a statement from an analyst with FTN Equity Capital Markets, “It also looks like consumer demand improved pretty significantly in January and February over December levels, which could have broader implications for the overall economy." The analyst currently has a "buy" rating on the stock.

In order to combat the increasing decline in consumer spending, Best Buy has reduced their workforce, while postponing additional store openings as well. Best Buy also began to expand their product line within their mobile phone division to help bolster sales. Over the past year, Best Buy opened 213 stores worldwide, with much help in sales from their Best Buy Europe stores.

Looking further into the company’s sales figures, Best Buy saw same store sales, those stores that were open at least 14 months, decline by nearly 5% overall. Within the U.S. markets, same store sales slipped 2.5% in the first two months of the year, much better than the 6.8% decrease during the holiday shopping season in December.

For 2008, the company saw net income slip more than 29% from 2007 results, as earnings came in at $1B, or $2.39 per share, in contrast to the previous year’s net income of $1.41B, or $3.12 per share. Sales, however, increased more than 12% for the year, climbing from $40.02B to $45.02B.

Moving forward, Best Buy is anticipating to record yearly earnings between $2.50 and $2.90 per share with overall revenues ranging between $46.5B and $48.5B. Best Buy is also forecasting the company’s same store sales to be flat to down 5% for the year, along with the company cutting store opening to around 65 for the upcoming year.

Analysts, in the meantime, are looking for Best Buy to post yearly earnings of $2.47 per share on sales of $48.05B.

By the end of trading on Thursday, shares of BBY surged throughout the session, gaining nearly 13% by the close, adding $4.21 to end the day at $37.67 per share. Over the past 52-weeks, shares of Best Buy have traded as low as $16.42 and as high as $48.03 per share.

By BetterTrades