Best Buy Shares Soar With O.K. News

Best Buy (NYSE:BBY) shares are up 5.20% today with news that the company isn’t quite doing as poorly as expected. While revenue was up last quarter, net income was down YoY due to higher input costs. But that’s not as bad as analysts had forecast. Net income during their first quarter dropped from 36 cents/share to 35 cents/share while analysts had predicted a drop to 33 cents/share on sales of $10.7 billion, a full $200 million below actual first quarter revenue of $10.9 billion. The general gist of it is, while profits fell, they didn’t fall as much as expected, so that’s a sort of glass half full situation.

CHECK OUT: Best Buy Co. Earnings Cheat Sheet

Sales at stores, call centers, and online also dropped 1.7% worldwide, and 2.4% in the U.S., but again, analysts were expecting worse, with a U.S. sales drop of 3-5%. Best Buy did have a few positive sectors, though, with domestic online sales up 12% and mobile phone sales up 28%, and comparable sales up 0.4% outside the U.S.

While Best Buy’s gross margin was hurt by promotional sales and higher input costs, their revenue still increased 1%, and that has the company and investors alike looking forward to a better second quarter. With the the repercussions of the Japanese earthquake and tsunami weakening as time passes, and gas prices on the decline, Best Buy could see a greater profit margin in Q2 despite competition from online retailers and manufacturers directly selling their products, fear of which has knocked down Best Buy shares 14% this year.

Competitors to Watch: CONN’S, Inc. (NASDAQ:CONN), RadioShack Corporation (NYSE:RSH), hhgregg, Inc. (NYSE:HGG), GameStop Corp. (NYSE:GME), Apple Inc. (NASDAQ:AAPL), Sears Holdings (NASDAQ:SHLD), Systemax (NYSE:SYX), Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Costco (NASDAQ:COST), Amazon.com (NASDAQ:AMZN), eBay (NASDAQ:EBAY), Overstock.com (NASDAQ:OSTK) and Funtalk China Hldgs. Ltd. (NASDAQ:FTLK).

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