Best Buy profit drops 19%; revenue rises 12%

Best Buy Co. said Tuesday that its second-quarter profit slid 19% as it spent money to boost cellphone sales by completing the rollout of its Best Buy Mobile concept to nearly 1,000 North American stores.

Revenue rose, however, as consumers bought more flat-panel TVs, laptops and cellphones, ahead of forecasts.

The nation’s largest consumer electronics retailer earned $202 million, or 48 cents a share, for the three months ended Aug. 30. That’s down from $250 million, or 55 cents, a year earlier. Revenue rose 12% to $9.8 billion.

The profit came in below Wall Street forecasts, sending the stock down, despite results that beat projections for revenue and same-store sales.

Analysts surveyed by Thomson Reuters had expected the company to earn 57 cents a share on revenue of $9.67 billion.

Despite the worse-than-expected profit, the company eked out a 4.2% increase in same-store sales, a retail industry metric that measures sales at existing locations rather than newly opened ones. In the U.S., comparable-store sales rose 5.3%.

The company reaffirmed its earnings per share guidance for the fiscal year Tuesday, saying it expected a profit of $3.25 to $3.40 a share on revenue of about $47 billion. Wall Street analysts expect Best Buy to earn $3.28 on revenue of $44.7 billion.

Shares of Richfield, Minn.-based Best Buy fell $1.30, or 3%, to $42.40.