Best Buy profit exceeds estimates after surprise gains

Best Buy Co., the world's largest electronics chain, beat third-quarter profit estimates after demand for televisions and tablets helped the retailer post a surprise sales gain. The shares jumped in early trading.

Excluding some items, earnings amounted to 32 cents a share, the Richfield, Minnesota-based company said today in a statement. Analysts had projected 25 cents on average, according to data compiled by Bloomberg. Comparable-store sales -- a closely watched benchmark -- rose 2.2 percent in the quarter. Analysts predicted a decline of 2 percent, according to Consensus Metrix.

Chief Executive Officer Hubert Joly, who cut costs after taking the job two years ago, is now working on the second part of his turnaround plan: reviving growth. While total revenue rose less than 1 percent last quarter, the gain followed two years of declines. The company had previously said revenue would fall in the quarter, without giving specific figures.

"Our strength in televisions, computing, and tablets versus the industry, in addition to our growth in gaming and appliances, drove a domestic comparable-sales increase," Joly said in the statement.

Best Buy rose as much as 9.7 percent to $39 in pre-market trading in New York. The shares had dropped 11 percent this year through yesterday, compared with an 11 percent gain for the Standard & Poor's 500 Index.

Best Buy's strategy to drive sales growth revolves around giving more floor space to top electronics brands like Samsung Electronics Co. and Sony Corp. Last month, it announced a deal with GoPro Inc. to add more of its video cameras to stores. Joly also has set a goal of trimming $1 billion in annual expenses through several initiatives, including improving the supply chain and negotiating cheaper store leases.

Third-quarter net income more than doubled to $107 million, or 30 cents a share, from $54 million, or 16 cents, a year earlier. Revenue climbed 0.6 percent to $9.38 billion in the period, which ended Nov. 1.

To contact the reporter on this story: Matt Townsend in New York at mtownsend9bloomberg.net To contact the editors responsible for this story: Nick Turner at nturner7bloomberg.net Bruce Rule