Best Buy quarterly earnings preview

Consumer electronics retailer Best Buy Co. Inc. (NYSE: BBY) is set to release its second quarter earnings tomorrow at 10 a.m. EDT, and it seems the retailer will have a fine quarter. Although sales of consumer electronics have been cited as slugging this past quarter, I am of the belief that Best Buy will barely fall short of consensus earnings estimates of $0.50 EPS for its most recent quarter. My guess? $0.49 EPS for the quarter.

Yes, there has been a slowdown of consumer electronics spending so far in 2007, but that has come at the expense of other chains like competitor Circuit City Stores Inc. (NYSE: CC) (in the midst of a horrid year) and even Tweeter, which just filed for Chapter 11. Is Best Buy immune to all this? Of course not, but the company has its act together and I think will continue to remain unscathed by the industry slowdown for at least another quarter (the one it is in now). The market share Best Buy currently has may soon be under attack at Wal-Mart Stores Inc. (NYSE: WMT) beefs up its home entertainment and electronics category, but that won't be overnight.

Again, we're hearing that the plummet in the prices of flat-panel television sets continues to beat up the industry. While this is true to a point, it's not killing the consumer electronics industry as a whole (although it's crimping margins). Therefor, I'm of the belief that BBY will tomorrow fall short of estimates by a penny, coming in at $0.49, but I'd still call this a relatively good performance.

I'll be liveblogging the earnings call as well right here at BloggingStocks, so be sure and return your browsers here at 10 a.m. EDT tomorrow and find out what the actuals are. Circuit City reports on Wednesday, so we'll see how both chains fare in the next few days.