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Best Buy&#039&#039s earnings drop 27 percent in 3Q

Consumer electronics retailer Best Buy Co. (NYSE: BBY) met lowered analyst estimates for its fiscal third quarter Tuesday, but saw a 27 percent drop in third-quarter earnings year over year.

Share of the company rose more than 7 percent, up 1.94 to 26.5.

The company reported third quarter net income of $57.3 million, or 27 cents per diluted share, meeting reduced analyst estimates. The company's net income was well off the $78.4 million, or 37 cents a diluted share, reported in the same period last year.

First Call Corp. cut its earnings estimate after Best Buy warned in November that it would miss profit expectations for the third and fourth quarters.

Third-quarter revenues rose 20 percent, to $3.7 billion from $3.1 billion a year ago. The company noted that comparable store sales increased 5.9 percent for the quarter.

Operating margin was 2.3 percent of sales for the quarter compared to 3.9 percent of sales for the corresponding quarter last year.

According to CEO Richard M. Schulze, the company's results were hampered by a combination of slowing consumer spending and a tighter competitive environment.

Schulze said he was pleased with Best Buy's top line and comparable stores growth and anticipated that these gains would help the company in the upcoming holiday season.