Weak TV, laptop sales hurt Best Buy 3Q profit

New Weak TV, laptop sales hurt Best Buy 3Q profit

Lower-than-expected spending on TVs and other electronics sends Best Buy 3Q net income down

MINNEAPOLIS (AP) -- Best Buy Co.'s third-quarter net income fell more than expected as it lost sales of TVs and laptops to competitors. It also cut its full-year outlook Tuesday.

Shares of the largest U.S. electronics chain fell nearly 13 percent in premarket trading as the results raised fears over the holiday season.

The company, which benefited when Circuit City went out of business last year, is facing stepped-up competition from online and discount stores.

Best Buy, based in Minneapolis, said its market share in TVs, mobile computing and video game software fell. Americans are also buying fewer TVs and other electronics. Best Buy said there were larger than expected industry declines in key U.S. consumer electronics categories for the three months ended Oct. 31.

"There remains a significant amount of business still ahead of us in the holiday selling season and we don't have complete visibility to how customers will behave over the next several weeks," said CFO Jim Muehlbauer.

Revenue in stores open at least 14 months fell 5 percent in the U.S., hurt by lower revenue from TVs and entertainment hardware and software. Best Buy sold fewer TVS, and prices have fallen as the industry works through a glut in TV supply.

That was partly offset by strength in mobile phones and tablet computers.

Net income in the fiscal third quarter, which ended Nov. 27, the Saturday after Thanksgiving, fell 4 percent to $217 million, or 54 cents per share, from $227 million, or 53 cents per share, last year. Analysts polled by Thomson Reuters, on average, expected 61 cents per share.

Revenue fell 1 percent to $11.89 billion, from $12.02 billion last year. Analysts expected revenue of $12.45 billion.

Revenue in stores open at least 14 months fell 3.3 percent.

The measure is considered an important measure of a retailer's financial health because it excludes stores that open or close during the period.

But he said the company's view today is it now expects net income of $3.20 to $3.40 per share, from a prior range of $3.55 to $3.70 per share, hurt by lower revenue in the U.S. Analysts expect $3.59 per share.

Shares fell $5.27, or 12.6 percent, to $36.43 in premarket trading.