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Circuit City swings to profit as cost cuts offset sales drop

April 10, 2008|From the Associated Press

RICHMOND, VA. — Struggling electronics retailer Circuit City Stores Inc. said Wednesday that it had swung to a fiscal fourth-quarter profit as cost cutting offset lower sales for a period that included the bulk of the holiday shopping season.

Analysts had been expecting a loss for the December-February period on higher revenue for the Richmond-based company, which hadn't seen a quarterly profit since the second quarter of 2007.

The second-biggest U.S. electronics retailer said it earned $4.85 million, or 3 cents a share, in the three months ended Feb. 29 versus a loss of $4.25 million, or a 3-cents-a-share loss, a year earlier. Analysts polled by Thomson Financial predicted a 7-cent loss.

Philip J. Schoonover, Circuit City's chief executive, said that although fiscal 2008 was disappointing, the fourth quarter showed progress.

"We remain confident that we are on the right track," Schoonover said.

The company said it achieved about $65 million in reduced costs and expenses in the quarter from continued structural changes.

That more than offset an 8% drop in sales to $3.65 billion. Analysts expected revenue of $3.79 billion. Sales in stores open at least a year fell 10.4%.

Circuit City shares fell 8 cents to $4.45.

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