Best Buy ( BBY) and Circuit City ( CC) both beat third-quarter earnings expectations on Tuesday, but that doesn't mean their holidays will be happy. Best Buy lowered its guidance for its fiscal fourth quarter, which began Dec. 1, by 5 cents per share. Circuit City declined to provide any kind of projections at all for how it would fare in its fourth quarter. The soft economy, a dearth of must-have electronics products and increased competition from discounters such as Target ( TGT) and Wal-Mart ( WMT) threaten to spoil the holidays for both companies, warned Scot Ciccarelli, an analyst with Gerard Klauer Mattison. "I think it's going be tough for both of them," Ciccarelli said. "It's a little more onerous for Circuit City. Providing no guidance for the fourth quarter is usually not a good sign." Gerard Klauer Mattison does not have any investment banking business with either company. The disappointing outlooks for the electronics retailers come amid a generally downbeat holiday shopping season to date. A survey by ShopperTrak RCT on Monday, for instance, projected that retail sales would fall 5.4% this month from last December. Meanwhile, Wal-Mart , Target and Federated Department Stores ( FD) have reported weekly sales in December that are at or below the low end of their projections. Best Buy, at least, posted fairly strong third-quarter numbers. The Minneapolis-based retailer earned $85 million, or 26 cents a share, on $5.5 billion in revenue. Last year, Best Buy earned $80 million, or 25 cents a share, on $4.8 billion in revenue. The company's gross profit margin held steady at 21.6% of sales, while its sales, general and administrative expenses increased slightly to 19% of sales, from 18.9% last year. But those numbers hid more developments for Best Buy. The company's Musicland division, which it acquired last year, continues to struggle. While comparable-store sales in the third quarter for the entire company declined by 0.4%, same-store sales at Musicland stores dropped a whopping 11.5%. Same-store sales compare results from outlets open more than one year.