Tweeter Misses Earnings on Weak TV Panel Revenues -- Best Buy and Circuit City Should Follow Suit

Well, the Street knew that Tweeter Home Entertainment (TWTR) was going to report bad numbers for the fiscal first quarter ended December 31 -- but not this bad.

Tweeter this afternoon reported revenue for the quarter of $235 million, down 12% from $267 million a year ago. The Street was looking for $250 million. Comparable store sales fell 10%. Flat-panel TV sales increased 39% in units versus a year earlier, but average selling prices fell 24%. Projection TV revenues fell 45%, similar to the decline in the September quarter. Projection TV units were down 33% versus last year, while pricing was down 18%.

LCD TV unit sales rose 74%; plasma TV sales increased just 3.5% in units.

The company also said that to reduce costs, it has restructured its corporate and administrative functions and cut 20% of its overhead positions, which it says should save $6 million a year.

Tweeter will announce final numbers for the quarter on February 6.

Meanwhile, both Best Buy (BBY) and Circuit City (CC) are expected to announce December sales tomorrow. Expect to see continued evidence of the toll on margins from aggressive competition in flat panel TVs.