Best Buy reports increase in earnings

/ Source: The Associated Press

Consumer electronics retailer Best Buy Co. reported a nearly 8 percent increase in second-quarter earnings on Wednesday, helped by improved cost controls and margins.

For the three months ending Aug. 28, the company earned $150 million, or 46 cents per share, from $139 million, or 42 cents per share, a year ago. The latest quarter includes charges of 7 cents per share for asset impairments, transition costs associated with outsourcing the company's information technology operations and the preliminary settlement of pending litigation.

Excluding the charges, the company earned 53 cents _ a penny higher than the 52 cents per share figure from analysts surveyed by Thomson First Call.

In morning trading, Best Buy shares were up $1.91, or 3.8 percent, at $52.20 on the New York Stock Exchange _ extending an upward trend that began earlier this month after the stock briefly dipped below $45 per share in August.

Second-quarter revenue increased 13 percent to $6.1 billion from $5.4 billion last year, due to the addition of 75 new stores in the past 12 months and a 4.3 percent gain in sales at stores open at least a year.

Best Buy said third-quarter earnings should be in the range of 41 cents to 47 cents per share, an increase of about 19 percent from the year-ago period, driven by 3 percent to 5 percent gain in sales at stores open at least a year. The company also reiterated its earnings outlook for fiscal 2005, predicting earnings will grow 15 percent to 20 percent to range between $2.80 to $2.93 per share, including charges. Revenue is expected to be about $27.5 billion.

Analysts forecast that Best Buy will post earnings per share of 44 cents and $2.90 in the third quarter and fiscal year, respectively.

In addition, the company said it now anticipates capital expenditures of $550 million to $600 million for fiscal 2005, less than originally planned.