Best Buy beats expectations

Best Buy Co. Inc. (NYSE: BBY) topped estimates Tuesday by two cents a share with first quarter earnings of 22 cents a share on sales of $2.38 billion.

Shares of the Minneapolis-based Best Buy were up 1 11/16 to 54 7/16 in early trading.

The First Call estimates had been bumped up from 13 cents a share. Best Buy, the top electronics retailer, said June 3 that it would top estimates. Earnings, more than triple those of same quarter last year, were a result of higher-than-expected sales and improving margins, according to the company.

The first quarter earnings were $47.2 million, or 22 cents a share, three times the earnings of $15.7 million or 8 cents per share in the year-earlier period. Revenue of $2.38 billion was a 23 percent increase from the $1.9 billion of last year's first quarter, according to Chairman and CEO Richard M. Schulze.

Comparable store sales increased 13.3 percent, representing the sixth straight quarter of double-digit increases.

The gross profit margins were 19.4 percent of sales, compared to last year's 18.2 percent Schulze cited more effective advertising, better inventory management, and improved sales. The sources of revenue were the same as last year, with home office comprising 37 percent of sales, consumer electronics 27 percent, and software and appliances making up the remaining 27 percent.

Best Buy plans to open 20 new stores in the second quarter, adding to its 314 stores in 36 states. It is the top electronics retailer ahead of Circuit City (NYSE: CC) which has 560 stores in the U.S.