Best Buy (BBY) Falls 9% on Weak Earnings

Best Buy (NYSE: BBY) may be a misnomer considering how rapidly the stock is falling today.

The world’s largest electronics chain reported a $1.7 billion earnings loss last quarter, a complete about-face from a year earlier when the company made a quarterly profit of $651 million. As a result of the weak earnings, Best Buy’s stock is in free fall this morning. As of 11:20 a.m., shares were down 9.4% – and still falling.

Slumping same-store sales contributed to Best Buy’s rough quarter. Stores open at least 14 months saw their sales decline 2.4% from the same quarter a year ago.

But the poor earnings were largely due to the $2.6 billion in restructuring costs and other charges the company had to pay. Without those charges, Best Buy actually turned a profit. Minus the charge, Best Buy booked a per-share profit of $2.47, outpacing the $2.16 per share most analysts expected.

Still, it hasn’t been the best start to 2012 for Best Buy. In a time when S&P 500 stocks have risen more than 12% in the first three months of the year, Best Buy has made only marginal gains of less than 2%.

To improve its fortunes, Best Buy plans to cut $800 million in costs by closing 50 stores and eliminating 400 jobs. It currently operates about 1,100 box stores.