Best Buy tops estimates on strong mobile sales

By Dhanya Skariachan

NEW YORK (Reuters) – Best Buy Co Inc beat quarterly profit and sales estimates as strong demand for mobile phones, calling plans and tablets offset weakness in its TV business, and its shares rose 6 percent.

The company, seen as a bellwether in consumer electronics, also backed its profit outlook for the year.

The news comes just months after the biggest U.S. consumer electronics chain decided to focus more on its mobile phone and online businesses and shrink its big-box format as investors raised concerns about the huge overhead costs and oversized stores at a time when many shoppers go online to buy gadgets.

In the United States, demand was strong for mobile phones, tablets, eReaders, appliances and services, while sales of televisions continued to be weak. Outside its home turf, the retailer saw strong demand in China even as same-store sales fell in Europe and Canada.

The company said its first-quarter net profit was $136 million, or 35 cents a share, compared with $155 million, or 36 cents a share, a year earlier. Analysts on average were expecting a profit of 33 cents a share, according to Thomson Reuters I/B/E/S.

Sales rose 1.4 percent to $10.94 billion, beating the analysts average estimate of $10.71 billion. Same-store sales in the quarter fell 1.7 percent, while analysts were looking for as much as a 4 percent decline.

Best Buy faces stiff competition from online retailer Amazon.com Inc and discounters Wal-Mart Stores Inc and Target Corp

The retailer recently announced plans to boost its Web presence, shrink some larger stores and open more of its smaller U.S. stores.

Earlier on Tuesday, Carphone Warehouse which owns 50 percent of a joint venture with Best Buy in Europe, said it has delayed a decision on the next steps for its loss-making UK consumer electronics megastores business until the autumn, mulling the wisdom of expanding as consumer demand slides. (Reporting by Dhanya Skariachan; Additional reporting by James Davey in London, editing by Gerald E. McCormick, Dave Zimmerman)