The company reported diluted EPS of $0.47, compared with $0.60 in the same period a year ago and a consensus analysts’ estimate of $0.53. Revenue totaled $11.35 billion in the quarter, essentially flat with a year ago, and lower than the estimate of $11.52. This is a pretty woeful showing for a retailer that competes directly with such smaller companies as RadioShack Corp. (NYSE: RSH), hhgregg, Inc. (NYSE: HGG), and Conns Inc. (NASDAQ: CONN).

Those much smaller companies aren’t Best Buy’s biggest problem. That comes from the massive players it really competes with: Wal-Mart Stores Inc. (NYSE: WMT), Amazon.com (NASDAQ: AMZN), among others. Best Buy said that sales of tablets, eReaders, and appliances rose but that sales of televisions, game controllers, digital media devices, and physical media (blank CDs and DVDs) were lower and offset other gains.

Perhaps worse, the company’s sales of mobile phones fell -5%, but it wasn’t Best Buy’s fault. The company said the decline was “due to industry softness driven by the lack of significant new phone launches during the quarter” when compared to same period a year ago. The facts notwithstanding, Best Buy said that it “believes that it continued to grow share in mobile phones in the second quarter.” Whatever.

In order to get investors to believe that line, the company touted its buyback of $358 million worth of its stock during the quarter, bringing its total buyback for the year to $863 million. Best Buy expects to buy back $1.5 billion of its stock in the 2012 fiscal year, which the company says adds $0.20-$0.25 of “annual EPS benefit.”

Then in a fit of honesty, Best Buy notes that if you back out the buyback benefit, the company’s EPS range is $3.30-$3.55, unchanged since its original FY2012 forecast in March. Analysts were expecting full-year EPS of $3.48.

From a high of around $32/share in mid-June, Best Buy shares have fallen by about -25%. That’s the primary reason the stock is getting a little pre-market boost this morning — the results weren’t terrible and there’s plenty of room for the stock to go up. Of course with the bar set very low, lukewarm results don’t look so bad.

Best Buy’s shares are up about 0.75%, at $25.15, at 40 minutes before the market opens this morning. That tiny bump is not likely to last.

Paul Ausick

Affymetrix Inc. (NASDAQ: AFFX) announced preliminary revenues of about$75.0 million vs. $90 million expected from First Call consensus.  Thecompany said global sales fell below expectations for the quarter asincreased competition for academic research funding and continuedsoftness in industrial spending.

BE Aerospace Inc. (NASDAQ: BEAV) is seeing its shares tradeup on a large order announcement from Airbus.  The maker of airplaneinteriors raised earnings guidance for this past quarter to $0.54 per share vs. $0.50estimates, but it lowered guidance in Q4 to $0.50 vs. $0.57estimates.  Due to issues in the airline sector and delays in aircraftorders and building delays, the company is also lowering 2009 and 2010expectations.

Coherent, Inc. (NASDAQ: COHR) expects revenue of $141 million to$142.5 million rather compared with its prior range of $154 million to $157 million.The photonics-based solutions provider company is also closing itsexcimer laser site in Munich, Germany and will consolidate thoseoperations in Goettingen, Germany.

Conn’s, Inc. (NASDAQ: CONN) said Hurricanes Ike and Gustav took outroughly 144 store days of performance for the quarter.  The companysaid it will update guidance in November, but for all practicalpurposes this is a light version of an earnings warning from theelectronics and home appliances retailer with operations throughoutLouisiana, Texas, and Oklahoma.

NBTY Inc. (NYSE: NTY) issued preliminary guidance of $602 million inrevenue, rather than the $614.7 million estimates.  The company saidorganic growth in US wholesale nutrition sales were up 12%, butEuropean sales were down 14%.  It also noted that same-store sales inthe US were down 10%.  No indications have been seen on this one yet.

Orbotech Ltd. (NASDAQ: ORBK) has issued lower guidance for thirdquarter revenues with a lower range of $90 to $95 million rather thanthe $104.5 million consensus as certain PCB customers have deferreddeliveries for its PCB systems.

Jon C. Ogg
October 13, 2008