Best Buy Profit Beats View, Sees Q1 Results Below Estimate; Plans $1 Bln Buyback

(RTTNews) - Consumer electronics retailer Best Buy Co. Inc. (BBY) reported Thursday a decline in fourth-quarter net profit on charges and weak revenues. Adjusted earnings and revenues topped analysts' estimates. For the first quarter, the company projects results below market view.

Separately, Best Buy announced that its Board of Directors authorized a plan to return excess capital to shareholders. The company announced a 22 percent increase in the regular quarterly dividend to $0.28 per share, effective immediately, and a new $1 billion share repurchase plan expected to be completed over the next two years. The company also announced a special dividend of $0.45 per share, or approximately $145 million.

For the fourth quarter, net earnings attributable to shareholders declined to $479 million from last year's $519 million. Earnings per share were $1.40, lower than $1.46 a year ago.

Net earnings from continuing operations fell to $477 million or $1.39 per share from $524 million or $1.47 per share.

Adjusted earnings from continuing operations was $1.53 per share, compared to $1.48 per share last year.

On average, 21 analysts polled by Thomson Reuters expected earnings of $1.39 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue declined to $13.62 billion from prior year's $14.21 billion. Analysts expected $13.61 billion.

Comparable sales declined 1.7 percent, compared to last year's increase of 2.8 percent.

Looking ahead, for the first quarter, the company expects adjusted earnings per share of $0.31 to $0.35 versus $0.37 last year, and enterprise revenue in the range of $8.25 to $8.35 billion, a decline of 2.4 percent to 3.6 percent. Analysts expect earnings of $0.39 on revenues of $8.45 billion. Enterprise and Domestic comparable sales are expected to decline 1 percent to 2 percent.

Sharon McCollam, Best Buy EVP, CAO and CFO, said, "As it relates to Q1 FY17, in the Domestic business, we believe that the softness that we saw in the NPD-tracked categories and mobile phones will continue. We also believe that in the International business, revenue will be down approximately 15 percent to 20 percent due to the ongoing impacts of foreign currency and the Canadian brand consolidation, which was not executed until late March of 2015."

The company said it is expecting revenue declines in the first half followed by growth in the back half.

In pre-market activity on the NYSE, Best Buy shares are losing 3.08 percent to $30.50.