TVs Fuel Circuit City Sales

The nation's second largest electronics retailer said earnings for the period ended Aug. 31 were $10 million, or 6 cents a share, up from $1.3 million, or one cent a share in the year's prior quarter. The company, which operates more than 600 stores the United States and 900 retail outlets in Canada, is the nation's second largest electronics chain next to Best Buy.

Sales for the quarter were up 11% to $2.84 billion, buoyed by domestic internet sales that grew 74% in the three month period. Sales at stores open at least one year were also up by 8.3%.

Earnings from continuing operations reached $11.4 million, or 7 cents a share, an increase of more than $7 million from the $3.9 million, or 2 cents a share, earned in the prior year's first quarter. Analysts had expected earnings of 5 cents a share on sales of $2.82 billion. It was the fifth quarter in a row that Circuit City beat analysts' earnings expectations.

The Richmond, VA-based firm said the strong earnings were led by double-digit sales of flat panel televisions, digital imaging equipment and accessories. The company also saw strong demand for in computer hardware, notebook computers, portable audio products, and navigation and gaming systems at stores open at least a year.

"We are particularly pleased with our results, given the mixed macroeconomic signals and aggressive competitive environment during the quarter," said Philip J. Schoonover, chairman, president and chief executive officer of Circuit City Stores, Inc.

Schoonover, citing recent volatility in the market and increased competition from other electronics retailers, said the firm plans to capitalize on a projected 15% growth in the flat panel business by enhancing its video and audio lines with new product additions and improved installation services.

As part of those enhancements, the firm recently began resetting video and audio departments in 500 stores. Circuit City also recently launched its "Firedog" service, a new program to assist buyers with installation of televisions, home theaters and other video and audio equipment.