Analysts expect strong 3rd-quarter results from Best Buy

Earnings Preview: Best Buy

NEW YORK — Electronics retailer Best Buy Co. reports earnings for its fiscal third quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Best Buy has gained market share since its biggest direct competitor, Circuit City, closed last year. But it faces tight competition from lower-priced stores like Walmart and Target and online retailers like Amazon.

The Minneapolis company expanded into new product categories during the quarter, including fitness and DJ equipment.

Last month Best Buy said the CEO of its international unit, Robert A. Willett, will retire, effective Dec. 31, and it does not plan to name a successor.

BY THE NUMBERS: Analysts polled by Thomson Reuters predict, on average, that Best Buy will report a profit of 43 cents per share on revenue of $11.98 billion. In the same period last year, Best Buy earned $52 million, or 13 cents per share, as revenue rose 16 percent to $11.5 billion.

ANALYST TAKE: Citi Investment Research analyst Kate McShane raised her forecast for Best Buy’s earnings Monday.

“We are seeing stronger traffic at Best Buy in its laptop, Geek Squad and video game sections while traffic remains healthy in TVs and digital cameras,” she wrote in a note. “We believe Best Buy continues to benefit from share gains from the liquidation of Circuit City.”

She increased her third-quarter estimates to 45 cents from 38 cents per share.

Still, she kept her hold rating on the stock.

“Despite its market share gains and strong inventory management, we expect a difficult macro environment will continue to pressure margins over the next year while competition remains intense from regionals, discounters and club stores,” she wrote.

WHATS AHEAD: Analysts will be looking for any insight on what consumers are buying during this crucial holiday season.

STOCK PERFORMANCE: Best Buy shares rose 14 percent during the quarter, which began Aug. 30. The shares closed at $44.34 on Friday, close to the high end of their 52-week range of $23.97 to $44.50.