Best Buy Stock Rises on Earnings
Best Buy Co Inc. (BBY) rose the most in a month after the electronics retailer reported profit that beat analysts' estimates, as cost-cutting efforts and improved sales in the U.S. and abroad offset a decline in mobile phone sales.
The shares rose 9.3 percent to $45.95 in New York trading, the biggest gain since Sept. 21. Best Buy has gained 45 percent this year, compared with a 14 percent advance in the S&P 500 Index. Rival retailers such as Costco Wholesale Corp. and Target Corp. also rose.
The company's net income rose to $173 million, or $1.40 a share, from $59 million, or 49 cents, a year earlier, Best Buy said today in a statement. Earnings per share excluding some costs was $1.58, exceeding the $1.47 average estimate of 24 analysts surveyed by Bloomberg.
Best Buy has been cutting costs and improving sales in the U.S. and abroad, including a 20 percent increase in online sales over the past year, Chief Executive Officer Hubert Joly said on a conference call today.
"We have a very strong pipeline of products that will come out in the next few weeks, and we are in a good position to win the holiday season," Joly said.
Key Statistics:
- EPS (excluding some costs) $1.58 vs. $1.47 estimated
- Net income $173 million vs. $59 million a year earlier
- Online sales increased 20 percent over the past year
"We have a very strong pipeline of products that will come out in the next few weeks, and we are in a good position to win the holiday season."
Author's note: Best Buy's earnings beat expectations, driven by cost-cutting efforts and improved sales in the U.S. and abroad, but mobile phone sales declined.
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