Best Buy plans big cuts as profit drops

Best Buy Co. offered voluntary severance packages to virtually all its 4,000 corporate employees Tuesday as the nation’s largest consumer electronics chain announced its third-quarter profit skidded 77%.

The results, which beat Wall Street’s lowered expectations, came in what the company called the “most challenging consumer environment” in its history.

Best Buy shares rose $4.21, or 18%, to $27.68.

The company earned $52 million, or 13 cents a share, in the quarter ended Nov. 29, down from net income of $228 million, or 53 cents, a year earlier.

Excluding a charge related to a decline in market value of its 2.9% stake in British company Carphone Warehouse Group, the company’s profit came to 35 cents a share.

Revenue climbed 16% to $11.5 billion from $9.93 billion a year earlier.

Best Buy plans to cut capital spending 50% in 2009.

The chain plans to open “significantly” fewer stores in the U.S., Canada and China next year.