Circuit City’s Profit Jumps

Circuit City Stores Inc. said Wednesday that fiscal fourth-quarter profit rose a better-than-expected 65%, driven by strong sales of flat-panel televisions.

Sales were also better than analysts had expected, and the company’s shares rose 8.3% on the news.

The consumer electronics retailer said it expected its sales momentum to continue -- especially in the first half of its current fiscal year, which began in March.

Circuit City reported net income of $141.1 million, or 80 cents a share, for the quarter ended Feb. 28, compared with $85.4 million, or 45 cents, a year earlier.

Earnings from continuing operations were 84 cents a share. Analysts on average had expected 77 cents a share, according to Reuters Estimates.

Revenue rose 13% to $3.91 billion, beating analysts’ expectations of $3.88 billion. Same-store sales, or sales at stores open at least a year, a key measure for retailers, rose 11.6%.

Sales growth was led by a triple-digit same-store increase in sales of advanced technology televisions, the company said.

Voracious demand for digital TVs, specifically flat-panel models, has lifted sales at Circuit City and rival Best Buy Co., which reported higher fourth-quarter sales and earnings March 30. Those products are also more profitable for retailers.

From December to February, more than 1.36 million liquid crystal display and plasma televisions were sold by U.S. retailers, up 159% from a year earlier, according to market research firm NPD Group.

“The end-consumer demand is really so strong you really don’t have to discount and promote the product as much as you might think,” said Scot Ciccarelli, an analyst at RBC Capital Markets.

Circuit City’s fiscal fourth quarter, which includes holiday shopping in December and the Super Bowl, accounts for the bulk of the retailer’s annual profit. The Super Bowl is a big driver for purchases of high-end TVs.

Sales rose in the quarter even though the number of customers didn’t rise, analysts said.

“Traffic was flat for the quarter, outpacing the declining traffic trends at archrival Best Buy and suggesting that Circuit City is gaining share against Best Buy,” Mark Rowen, an analyst at Prudential Equity Group, said in a research note.

For fiscal year 2007, Circuit City predicted total sales growth of 7% to 11%, including 5% to 7% domestic same-store sales growth. For fiscal 2006, the retailer had sales of $11.6 billion.

Shares of Richmond, Va.-based Circuit City rose $2.04 to $26.65.