Best Buy reports weak 3Q sales, cautious outlook

Best Buy shares are plunging today after the electronics retailer reported disappointing quarterly sales and a cautious outlook for the key holiday shopping season.

The company says it expects "near flat" revenue in the fourth quarter as it faces price pressures and tougher competition from online stores. In addition, a company official says the timing of the Super Bowl will hurt sales because the game will not occur during the retailer's fourth quarter, which is usually the case.

Best Buy said growth in computing and appliance sales was offset by weak tablet, mobile phone and digital imaging device sales. Also, the company saw a drop in service revenue. International revenue plunged on a mix of smaller operations in Canada and a stronger U.S. dollar.

The Richfield, Minn.-based company reported that its fiscal third-quarter profit rose 16.8 percent to $125 million, or 36 cents per share. Earnings, adjusted for one-time gains and costs, came to 41 cents per share, surpassing Wall Street expectations.

But the company reported a 2.4 percent drop in revenue to $8.82 billion, which fell short of Wall Street forecasts. It also reported disappointing same-store-sales growth of 0.5 percent.

MPR News reporter Martin Moylan contributed to this report.