Best Buy (BBY) Slammed After Q3 Miss; CE Sales Not Enough to Make Up for Margins

Shares of Best Buy (NYSE: BBY) are taking a tumble Tuesday morning following a third-quarter miss.

Revenue for Best Buy increased 2 percent from $11.89 billion during the same quarter last year to $12.10 billion. Same-store sales rose just 0.3 percent, domestic comps rose almost 1 percent, and online sales rose 20 percent.

Despite the move higher in sales, operating income fell 54 percent from $385 million in 2011's third quarter to $178 million, or 42 cents per share. Adjusting for certain one-time items, earnings rose to 47 cents per share.

The Street was expecting revenue of $12.14 billion and earnings of 51 cents per share.

Best Buy did great internationally, with adjusted net income rising 82 percent. Gross margin fell from 25.1 percent to 24.2 percent.

Benefiting domestic sales were mobile computing (including tablets), appliances, eReaders, mobile phones, and movies, while digital imaging and gaming saw declines in the quarter.

Looking ahead, Best Buy affirmed its fiscal 2012 earnings outlook of $3.35-$3.65 per share. Sales are expected to be in the range of $51-$52.5 billion.

Best Buy shares are trading about 8.4 percent lower Tuesday morning.

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