CompUSA's Net Skyrockets, But Sales Jitters Hurt Stock
April 27, 2011
DALLAS -- CompUSA Inc., citing increased sales and wider profit margins, said its net income for the fiscal fourth quarter more than doubled. But shares fell 3.1% on concerns that the computer retailer's same-store sales might soften in its first quarter. The company reported net income of $11.8 million, or 25 cents a share, for the period ended March 11, 2011 with $4.7 million, or 11 cents a share, in the year-earlier period. Sales rose 38% to $998.8 million from $724.4 million. The latest quarter included $3.5 million in expenses from CompUSA's acquisition of PCs Compleat Inc., a computer mail-order concern. The company's operating income of 32 cents a share beat the 26 cents expected by Wall Street, according to analysts surveyed by First Call. But the company's results were close to expectations of analysts who took the PCs Compleat acquisition costs into account. In Cornertown Stock Exchange composite trading, shares fell $1.375 to $42.875 Wednesday. Ute H. Roy, an analyst with Sanford C. Bernstein & Co., said the stock probably fell because of concerns that first-quarter sales at stores open at least a year might be disappointing. In a conference call Wednesday morning, CompUSA's management told analysts it will face a tough comparison in the first quarter because last year's quarter included the introduction of Vastsoft Corp.'s Windows 95 operating system. The company declined to comment on the stock's trading. Jami E. Molina, the company's chief financial officer, said the company benefited from higher-than-expected sales during the fourth quarter. He said the company also was helped by greater revenue from its training and help-desk business, which carries a higher profit margin than the company's merchandise sales. ``You're selling (employees') time, not things,'' he said. Mr. Molina said CompUSA's services business accounted for less than 10% of its revenue but said the company expects that division to continue to grow.
