Best Buy posts sales gains for December

Best Buy Co., the largest U.S. electronics retailer, saw a key sales figure rise sharply in December — compared with a plunge a year earlier — as consumers bought computers, TVs and phones for the holidays, the company said Friday.
But Best Buy didn't raise its earnings forecast, and its shares fell $1.63, or 3.9 percent, to close at $39.91 Friday. They had risen steadily in 2009 and hit a 52-week high of $45.55 on Dec. 14 but quickly pulled back.
Even though the December sales figures were strong, analysts said Best Buy's stock isn't likely to rise much during the first half of 2010 because investors are worried about increasing competition and a scarcity of must-have electronics in development.
"Wow! What a strong sales number," wrote Janney Capital Markets analyst David Strasser. But he kept his "Neutral" rating on the stock.
"We continue to believe that the stock will remain range-bound through the first half of 2010," he wrote. "Additionally, the benefit from Circuit City closures has peaked."
Best Buy has gained market share since rival Circuit City liquidated last year, and company officials said it gained December market share in the U.S., though competition from discounters and online retailers remains fierce.
Morningstar analyst R. J. Hottovy said the stock may be down because "expectations may have gotten ahead of themselves." And he said price cuts in the competitive electronics sector may have cut into Best Buy's profit margins.
December sales in Best Buy stores that had been open at least a year rose 8.2 percent, compared with a 6.5 percent drop a year earlier. That includes a 9.3 percent rise domestically and a 3.5 percent increase internationally.
Sales in stores open at least a year are a key retail measure because they exclude sales at stores that open or close during the year.
Best Buy's total sales rose 13 percent to $8.5 billion.
Consumer electronics and appliance sales were strong, movies and music weaker. Online revenue in December rose 34 percent from a year earlier as traffic grew.
Electronics were top sellers this holiday season, with spending rising 7.3 percent in December, according to data service MasterCard SpendingPulse, which estimates spending in all forms including cash.
Retailers in general saw U.S. December sales in stores open at least a year rise 2.8 percent from December 2008, according to the International Council for Shopping Centers sales index. For the full calendar year, the figure fell 2 percent.
The Minneapolis company still expects to earn $3.00 to $3.15 per share this fiscal year, excluding one-time items. Analysts expect a profit of $3.10 per share. Analyst estimates typically exclude one-time items.A resurgent mining sector helped push the leading share index into positive territory on Friday as disappointing US employment figures revived investor concerns about the pace of economic recovery.
The FTSE 100 index inched up 0.14 percent to close at 5,534.24 points, after bouncing back from a session nadir of 5,495 following the weak jobs report.
The US Labor Department said the US economy lost 85,000 jobs in December while the unemployment rate was unchanged at 10.0 percent.
"The market and global investors expected a good employment report. Now we can see how much they are disappointed," said Al Goldman at Wells Fargo Advisors.
British investors shrugged off the weak jobs report and flurry of late trades saw Lloyds Banking Group (LBG) end the session as the most traded blue chip -- with 178 million units changing owners.
This was followed by Vodafone after investors exchanged 160 million units in the telecommunications giant.
Mining stocks helped push the FTSE 100 back into the black, with Eurasian the star performer after an upgrade from Royal Bank of Scotland.
The miner -- which is based in Kazakhstan -- saw its share price rise by 5.19 percent to close at 1,034.
Legal and General finished second on the FTSE 100 leaderboard, up 3.06 percent to end the session at 84.3 pence.
The MAN Group was the session's main casualty, shedding 2.32 percent of its value to close at 319.8 pence.
The London Stock Exchange was another heavy faller, down 2.21 percent to close at 707.5 pence.
Sterling held firm against both the euro and the dollar.
The pound was trading at 1.1135 euros at 17:08 GMT, up from the same time on Thursday.
It made similar gains against the dollar, inching up to 1.6000 from 1.5922 dollars on Thursday.