Solid earnings from Best Buy Co. Inc. are bound to lift spirits on Tuesday after the consumer electronics giant reported better-than-expected fiscal first-quarter earnings and sales.
Best Buy, which many observers see as a bellwether for retail sales reported earnings of $136-million (U.S.) or 35 cents a share. While that was down slightly from 36 cents a share last year, it beat analysts' expectations by two cents. Sales also topped forecasts.
The company reiterated its forecast for the year, even as some investors have begun to doubt the health of the U.S. economic recovery amid a batch of weak economic data in recent weeks. The shares rose 6.4 per cent in premarket activity.
Meanwhile, the economic backdrop looked promising, with the U.S. Commerce Department reporting retail sales in May that topped economists' expectations. Overall sales fell 0.2 per cent, but economists had been expecting a bigger 0.5 per cent setback, according to Bloomberg News. And after excluding auto sales, which slowed during the month, sales rose 0.3 per cent -- beating expectations for a 0.2 per cent gain.
The Labor Department reported that the producer price index rose more than expected last month, suggesting that inflation is on the rise. Wholesale prices increased 0.2 per cent, versus expectations for a milder 0.1 per cent gain. However, after excluding volatile food and energy items, the so-called core rate increased 0.2 per cent, matching expectations.
In Canada, investors get to sink their teeth into the latest quarterly earnings report from Sino-Forest Corp. This would not be such a big event during most quarters, but this marks the first report from the Chinese-based, TSX-listed company since a short-selling firm published allegations against the company, skewering Sino-Forest's share price.
The results? A big miss. Sino-Forest reported a loss of $22.1-million or 8 cents a share. However, there might be some extenuating circumstances: The company spent big money to acquire new plantations during the quarter and took a $53-million charge related to switching to new accounting standards. It will be interesting to see how investors react when trading begins in about 30 minutes.