Electronics retailer Best Buy Co., Inc. (BBY) reported Thursday lower profit in its first quarter on the absence of last year’s CRT settlement proceeds. However, earnings per share topped market estimates significantly with higher comparable sales. Looking ahead, for the second quarter, the company projects higher comparable sales, and also lifted fiscal 2018 forecast for higher growth.
In pre-market activity on the NYSE, Best Buy shares were gaining 11.86 percent to $56.40.
For the first quarter, net earnings declined to $188 million from $229 million a year ago. Earnings per share were $0.60, compared to $0.70 a year ago.
The company’s weak net profit was entirely driven by the large CRT settlement proceeds received last year which did not recur in the latest quarter. Excluding this, the prior year’s adjusted earnings from continuing operations were $0.43.
On average, 25 analysts polled by Thomson Reuters expected earnings of $0.40 per share. Analysts’ estimates typically exclude special items.
Operating margin declined to 3.5 percent from 4.4 percent last year. The prior year’s adjusted margin was 2.8 percent.
The quarterly revenues, from Enterprise, increased to $8.53 billion from last year’s $8.44 billion. Analysts expected revenues of $8.28 billion.
Enterprise comparable sales increased 1.6 percent, compared to a 0.1 percent drop last year, driven by growth in both the Domestic and International segments.
The company recorded significant growth in the online channel – with Domestic online comparable sales increasing 22.5 percent.
Domestic revenue of $7.9 billion increased 1.1 percent driven by comparable sales growth of 1.4 percent.
International revenue increased 0.3 percent driven primarily by comparable sales growth of 4 percent due to growth in both Canada and Mexico.
Looking ahead, for the second quarter, Best Buy projects adjusted earnings per share of $0.57 to $0.62 and Enterprise revenue in the range of $8.6 billion to $8.7 billion.