Best Buy reports better than expected earnings, increases shareholder dividend

Best Buy has reported 1.3 percent increase in revenue at $14.2 billion for fourth quarter. The company reported better sales in mobile phones and LED TV segment during the holiday season. Best Buy has also increased quarterly dividend to 21 percent, along with a one-time payment to shareholders.

The company also reported decline in tablet segment. “Clearly, we are gaining share. These two categories were the primary drivers of our year-over-year revenue growth, and more than offset weakness in the tablet category, which was impacted by material industry declines,” said, Hubert Joly, Best Buy president and CEO.

Minneapolis-based Best Buy also announced cost cutting measures to save $400 million in operating costs over next three years. CEO Joly said that the cost cutting will be gradual and structural in nature. The company won’t layoff employees for cutting costs, said Joly. Under Joly’s leadership, Best Buy has improved its position in the U.S. market and has managed to reduce costs. The company is also working on reducing delivery times and to concentrate on the best-performing segments.

The net income was up by 77 percent to $519 million ($1.46 per share). Best Buy announced one-time dividend of 51 cents per share. Best Buy is planning to spend $650-700 million on capital expenditure during current year, compared to $550 million for the last fiscal year.

Best Buy stock was trading higher during the day and closed at $39.18, up by 55 cents (1.42 percent). During the last 12 months, Best Buy has offered 45 percent return to investors. After Joly taking the control of the company in 2012, the stock has almost doubled.