Best Buy Co. Inc. reported a much higher-than-expected quarterly profit on strength in health and wearable items like smartwatches. Sale rose for home theatre systems, major appliances and computing products, but declined for mobile phones and gaming. This raised the largest US electronics retailer’s earnings outlook, sending its shares up more than 16%, at $38.18 in pre-market trading.
The company said net income rose to $198 million, or 61 cents per share, in the quarter, from $164 million, or 46 cents per share, a year earlier. Total revenue slightly rose to $8.53 billion in the second quarter ended July 30, snapping a three-quarter streak of declines. Sales at established stores rose 0.8 percent. Analysts on average had expected a 0.60 percent fall, according to research firm Consensus Metrix. Excluding items, the company earned 57 cents per share.
Best Buy is now expecting revenue of between $8.8 billion and $8.9 billion in the current quarter, with profit of 43-47 cents per share, but analysts polled by Thompson Reuters are expecting an average of $8.77 billion in revenue and a profit of 45 centers per share.
The company said it now expected low-single-digit percentage growth in fiscal-year operating income, compared with a previous forecast of “approximately flat” results.
“We continue to expect the slight revenue decline in the first half to be offset by slight growth in the back half,” Chief Financial Officer Corie Barry said in a statement.
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