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Earnings at Circuit City Rise Sevenfold

September 21, 2006|From the Associated Press

RICHMOND, Va. — Circuit City Stores Inc. said Wednesday that fiscal second-quarter profit jumped more than sevenfold, beating Wall Street's expectations, as it benefited from increased sales in flat-panel televisions and digital-imaging products and accessories.

The nation's No. 2 chain of consumer electronics stores, behind Best Buy Co., earned $10 million, or 6 cents a share, in the three months ended Aug. 31, up from $1.3 million, or a penny a share, a year earlier.

Sales increased 11% to $2.84 billion. Same-store sales -- sales at stores open at least a year -- rose 8.3%. The company said Web-originated sales in its domestic segment grew 74%.

Circuit City, which is based in Richmond, said earnings from continuing operations were $11.4 million, or 7 cents a share, up from $3.9 million, or 2 cents, in the year-earlier period. On that basis, analysts surveyed by Thomson Financial were expecting 5 cents a share on sales of $2.82 billion.

The company has exceeded analysts' expectations for five straight quarters.

Philip J. Schoonover, the chain's chief executive, was pleased with the earnings results, given the mixed economic signals and aggressive competition.

Circuit City is "making progress on managing our business better in challenging times," Schoonover said.

Circuit City saw a low double-digit gain in same-store video sales in the period, led by strong double-digit sales in flat-panel TVs and digital-imaging products and accessories. The results were partially offset by sales declines in camcorders and DVD hardware.

In the information technology category, the company saw high single-digit increases in same-store sales, driven by stronger sales in computer hardware and notebook computers. The results were partially offset by decreases in sales of printers, monitors and desktop computers.

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