Best Buy Co. (NYSE: BBY) said Thursday that it expects first quarter earnings at about 20 cents a share -- seven cents above First Call Corp. estimates. The windfall was driven by higher-than-expected sales and improving margins.
Best Buy shares were up 2 3/4 to 50 5/8 in early trading.
First Call's survey of 16 analysts is expecting 12 cents in profit for Best Buy's May quarter. Full results are scheduled to be announced on June 15. In the year-earlier period, Best Buy earned 8 cents a share on $1.943 billion in sales.
Sales for the first quarter in stores open for at least a year rose 13.3 percent for the quarter, down from a an 15.3 percent rise in 1998. Revenue for the quarter rose 23 percent to $2.38 billion. The origin of revenue was unchanged from last year, with home office comprising 37 percent of sales, consumer electronics making up 27 percent and software and appliances rounding out the remaining 27 percent of revenue.
"Sales gains in all of our major product categories can be attributed to market share gains and continued strength in consumer spending," said Allen Lenzmeier, the company's finance chief, in a statement. "Sales of digital technology products, personal computers, major appliances and televisions greatly exceeded our expectations for the quarter."
The Eden Prairie, Minn. company operates 290 stores in 32 states, selling consumer electronics as well as computers and related equipment. Best Buy is the top electronics retailer, ahead of Circuit City (NYSE: CC), which has 560 stores in the U.S.
In related news, Tandy Corp.'s (NYSE: TAN) RadioShack unit reported sales for last month were up 19 percent from last year to $292.4 million. Year-to-date, total sales rose to $1.4 billion from $1.25 billion.
Shares rose 1 to 47 7/8 on Thursday.