Management at Circuit City (CC) restated the company’s last two quarters of earnings and pull guidance for the current year. Part of the revisions are due to an increase in vendor allowances. The others have to due with revenue recognition policies for the company’s online sales.
The company was also good enough to drop this bomb:
"For the month of April, the company experienced substantially below-plan sales, primarily related to the large flat panel and projection television categories.
Due to this trend, the company now expects a loss from continuing operations before income taxes of $80 million to $90 million for the first quarter of fiscal 2008."
The stock is being hammered after hours, as it should be. Look for the company to drop below $16 at the open tomorrow, well below its 52-week low.
Douglas A. McIntyre
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