Best Buy cuts outlook, suspends buybacks

RICHFIELD, Minn., Tue Aug 21, 2012 – Best Buy Co. cut its fiscal-year profit outlook on Tuesday, citing lower expectations for industrywide sales and uncertainty about key product introductions, and the consumer electronics retailer suspended its share buybacks for the year.

Shares of Best Buy, which does not expect to further update its earnings outlook for the year, fell nearly 9 percent.

Best Buy also reported a decline in same-store sales – its eighth in the last nine quarters. That highlights the tough task ahead for new CEO Hubert Joly as he tries to engineer a turnaround at the world’s largest consumer electronics chain.

Sales at stores open at least 14 months fell 3.2 percent in the second quarter ended on August 4, including a 1.6 percent decline at the U.S. unit and an 8.2 percent drop internationally.

Net earnings fell to $12 million, or 4 cents a share, in the quarter from $150 million, or 39 cents a share, a year earlier. Excluding items, Best Buy earned 20 cents a share.

Shares of Best Buy fell 8.9 percent to $16.55 in premarket trading.

Joly was named Best Buy’s chief executive on Monday. The company is a bellwether for the consumer electronics industry.

Procter & Gamble profit tops forecast, plans buybacks

CINCINNATI, Fri Aug 3, 2012 – Procter & Gamble Co. posted a higher-than-expected quarterly profit despite a drop in sales, just weeks after the world’s largest household products maker took the blame for its disappointing performance and said it was focusing on ways to improve.

The results, released on Friday, are being watched closely for any early signals of how well P&G and its current leadership can fix a long list of problems, especially after activist investor William Ackman stepped in and bought about $1.8 billion worth of its shares.

The maker of Pampers diapers and Tide laundry detergent said it had talked with Ackman’s Pershing Square Capital Management, but did not divulge details of those discussions.

“We have a dialogue with Pershing just as we do with all investors, but of course we keep the content of these discussions confidential to protect the interests and proprietary thoughts of our investors,” CEO Bob McDonald told reporters on a conference call on Friday.

P&G also said it would repurchase $4 billion worth of its shares this fiscal year. In June it said it did not expect to do so because it wanted to preserve its credit rating.

CFO Jon Moeller said P&G changed its mind because it had growing confidence in its turnaround plan and more cash on hand than it had anticipated in June, while interest rates continued to fall.