Best Buy Reports Strong Revenue, Net Income Pressured by Margins

Richfield, MN (AHN) - Shares of Best Buy (BBY) are trading 4 percent lower Tuesday after the company reported a 7 percent drop in net income for the first quarter ended May 31.

Best Buy reported net income of $179 million or 43 cents a share on revenue of $8.99 billion. Income for the same quarter a year ago was $192 billion. Earnings per share are not comparable as the number of shares outstanding, also known as the "float", is lower this quarter; with less shares outstanding the EPS is higher than it would otherwise be.

Analysts polled by Thomson Financial expected revenue of $8.57 billion.

Net Income felt pressure as overall margin fell from 23.9 percent to 23.7 percent with consumers focusing on lower margin items according to the company.

Best Buy reported that they gained 1.5 percent in overall market share with gains coming in TV, videogame and mobile phone sales.

The company backed its full year forecast of revenue between $43 and $44 billion with earnings per share ranging from $3.25 to $3.42.

"It is very early in what we still expect to be a volatile year for the consumer," said Chief Financial Officer Jim Muehlbauer, according to Dow Jones Newswire. "While the challenges in the external environment will continue to make consumer spending difficult to predict, we are very encouraged by the local growth plans we've developed to serve our customers both today and into the future."

Shares of Best Buy last traded at $44 a share on more than twice average daily volume.