Best Buy Q2 Results Top Estimates, Sees Q3 Adj. EPS In Line; Stock Surges

(RTTNews) - Best Buy Co., Inc. (BBY) reported a profit for the second-quarter that grew 20.7 percent from the prior year. Both adjusted earnings per share from continuing operations and quarterly revenues topped analysts' expectations.

In the pre-market trade, BBY is currently trading at $37.41 up $4.61 or 14.05 percent.

"Our teams delivered a strong second quarter, with better-than-expected revenue and profitability in both our Domestic and International businesses," said Best Buy Chairman and CEO Hubert Joly.

The company anticipates non-GAAP earnings per share for third-quarter to be in the range of $0.43 to $0.47. Analysts project third-quarter earnings of $0.45 per share.

Looking ahead for the third-quarter of fiscal year 2017, the company expects Enterprise revenue in the range of $8.8 billion to $8.9 billion, or flat to 1% growth. It anticipates both Enterprise and Domestic comparable sales growth of approximately 1%. It expects International revenue to be approximately flat to down 5% on a reported basis and to be approximately flat on a constant currency basis.

The company reaffirmed its full year expectation of approximately flat revenue and raising full year non-GAAP operating income outlook.

It continues to expect the slight revenue decline in the first half to be offset by slight growth in the back half and in light of its first half performance, it now expects a full year non-GAAP operating income growth rate in the low-single digits versus our previous expectation of approximately flat.

Beginning in January fiscal year 2017, the company will no longer issue an interim Holiday press release due to the increasing significance of the month of January to the company's overall fourth quarter financial results.

Net earnings for the second-quarter rose 20.7 percent to $198 million from last year's $164 million, with earnings per share improving to $0.61 from $0.46 in the same quarter last year.

GAAP per share from continuing operations was $0.56, an increase of 22% from $0.46 in the prior year. Non-GAAP earnings per share from continuing operations were $0.57, an increase of 16% from $0.49 in the previous year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.43 per share for the second-quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter was $8.533 billion, compared to $8.528 billion in the prior year. Wall Street expected revenues of $8.40 billion for the quarter.

Domestic revenue of $7.9 billion increased 0.1% versus last year driven by comparable sales growth of 0.8%, partially offset by the loss of revenue from 12 large format and 22 Best Buy Mobile store closures. Industry revenue in the NPD-tracked categories declined 3.2%.

In Domestic business, comparable sales growth was 0.8% versus guidance of approximately flat. This is on top of comparable sales growth of 3.8% last year.

International revenue of $644 million declined 1.0%. This decline was driven by about 510 basis points of negative foreign currency impact. On a constant currency basis, International revenue increased 4.1% driven by growth in both Canada and Mexico.