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posted: 5/23/2014 1:01 AM

Best Buy posts profit on cost-cutting, tax benefit

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  • Consumer electronics retailer Best Buy said Thursday that a big tax benefit and cost-cutting pushed it to a profit in its fiscal first quarter.

      Consumer electronics retailer Best Buy said Thursday that a big tax benefit and cost-cutting pushed it to a profit in its fiscal first quarter.
    Associated Press

 
Associated Press

MINNEAPOLIS -- Consumer electronics retailer Best Buy said Thursday that a big tax benefit and cost-cutting pushed it to a profit in its fiscal first quarter.

Adjusted earnings beat expectations, but sales fell short of Wall Street estimates. In addition, the company said it expects revenue in stores open at least 14 months, a key retail metric known as same-store sales, will fall in both the second and third quarters.

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Its shares fell 5 percent in premarket trading.

Best Buy has been dealing with increased competition from online stores, notably Amazon.com, and discounters like Wal-Mart. Under CEO Hubert Joly, the company has been trying to turn around results, revamping merchandise, training employees and cutting costs.

The electronics seller said its net income was $461 million, or $1.31 per share. That's a turnaround from a loss of $81 million, or 24 cents per share, a year earlier.

That includes a one-time tax structure change that helped earnings by $1.01 per share. Adjusted earnings were 33 cents per share. That handily beat analyst estimates of 19 cents per share, according to FactSet.

Total revenue fell 3 percent to $9.04 billion from $9.35 billion. Analysts polled by FactSet expected $9.23 billion.

Revenue at stores open at least 14 months fell 1.9 percent. Looking forward, CFO Sharon McCollam said the company expects the measure to fall in both the second and third quarters as the consumer electronics industry remains weak and people wait to the fall for new launches of smartphones and tablets.

Shares fell $1.35, or 5.3 percent, to $25.35 in premarket trading. The stock is down about 36 percent since the beginning of the year.

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