Shares of software and hardware retailer CompUSA traded lower today after the company reported a 65-percent drop in net income for the first quarter, and warned that sales in the next quarter may come under pressure.
The company said it remains cautious for the second quarter of fiscal 1999, and is currently expecting "low-single digit negative" comparable store sales for the second quarter. Comparable store sales were down 1.7 percent in the first quarter.
The company said corporate sales softness, as well as lower average selling prices for products, would result in lower sales numbers for the second quarter.
CompUSA stock fell more than nine percent after the earnings announcement, but recovered to end down 0.1875 to 14.8750. Shares have traded as high as 38 and as low as 10.56 over the past 52 weeks.
The company said net income for the quarter fell 65 percent, yet it still managed to report results that beat consensus expectations. CompUSA earned $8.1 million, or 9 cents per share, surpassing expectations by 2 cents, according to consensus of analysts polled by First Call. For the year-ago quarter, CompUSA's net income was $23.5 million, or 25 cents per share.
"Although we are disappointed with our overall financial results for the first quarter of fiscal 1999, we are pleased with the improvements we have made since the fourth quarter of fiscal 1998," said CompUSA president and CEO James Halpin.
CompUSA saw net sales for the first quarter of fiscal 1999 increase 17 percent to $1.39 billion from $1.19 billion for the comparable period ended September 27, 1997.
CompUSA said its first quarter earnings per share included a loss of 5 cents from the company's acquisition of Computer City. The loss includes costs of closing Computer City's corporate headquarters, and other operating losses from Computer City stores, according to a release.
"Since we announced our acquisition of Computer City, we have worked aggressively to implement our integration strategy," said Halpin. "We are focused on completing the integration and are excited about the opportunities to improve their operating results."