Consumer electronics retailers
both delayed earnings announcements that had been expected to be made before Wednesday's opening bell.
Best Buy plans to delay its results by two days in order to reflect a recently realized tax benefit related to its former Musicland subsidiary. It said the change would likely increase its full-year earnings by at least $50 million.
Wall Street was expecting it to report earnings for the quarter of $1.55 a share, according to consensus estimates reported by Thomson First Call. That would mark an increase from the $1.42 a share recorded for the same quarter last year.
Its chief competitor, Circuit City, said it plans to release its results in seven to 14 days, after making changes to its lease accounting procedures. Analysts are expecting earnings of 56 cents a share for the quarter, up from last year's 46 cents a share.
Many retailers have adjusted regulatory filings in the wake of issues raised in recently published guidance from the
Securities and Exchange Commission
related to lease accounting. The company previously said its review of these issues has not identified any material impact on previously reported statements, but now it has identified an additional issue related to buildings built by Circuit City on leased property that were transferred to the landlord after reimbursement of construction costs.
At this point, the company said, the cumulative impact of the multiyear lease adjustments through the fourth quarter ended Feb. 28 is less than 5 cents a share. Historical and future net cash flow and the timing of any payments under the related leases will not be affected, but the company has yet to determine whether the adjustments will require a restatement of previously reported statements of operations.
"The company's business and its financial performance are fundamentally sound," said Circuit City's chief financial officer, Michael Foss, in a statement. He said the company will likely report full-year earnings between 33 cents and 35 cents per share for 2004, after a charge of 15 cents a share for costs associated with store closings. Wall Street is expecting earnings of 43 cents a share for the year.
Shares of Best Buy closed down 38 cents, or 0.7%, to $52.55, while Circuit City added 33 cents, or 2.1%, to $15.78.