First-quarter profits at Best Buy Co. Inc. leaped 85 percent, far ahead of analyst expectations, and the nation's largest consumer electronics retailer raised its guidance for the entire year.

First-quarter profits at Best Buy Co. Inc. leaped 85 percent, far ahead of analyst expectations, and the nation's largest consumer electronics retailer raised its guidance for the entire year.

Best Buy's shares rose $8.60, or 15 percent, to $67.72 in afternoon trading on the New York Stock Exchange, surpassing the previous 52-week high of $62.20.

The company said Tuesday that sales of high-end televisions rose at double-digit percentage rates, and sales of digital music players more than doubled from the same quarter last year. Television prices dropped less than Best Buy expected, but it made up for the decline by selling more of them. The company also said it needed fewer promotions to sell its gadgets.

"It was one of those times it's fun to be in business," Chief Executive Brad Anderson said.

Best Buy raised its projection for its fiscal 2006 earnings by 15 cents per share to a range of $3.10 to $3.25 per share.

First-quarter profit jumped to $170 million, or 51 cents per share, from $92 million, or 28 cents a share, in the year-ago period. On average, analysts polled by Thomson Financial expected earnings of 30 cents per share.

First-quarter revenue totaled $6.12 billion, up 12 percent from $5.48 billion a year earlier and well ahead of the $5.98 billion in sales expected by analysts.

Anderson said the profits were driven by better-than-expected revenue growth and gross profit margin, a lower tax rate and strong results from stores converted to focus on specific customer groups, such as suburban housewives or small-business owners.

That initiative, called "customer centricity," was announced last summer after a year of planning, and the company said it will be used in 150 to 200 stores by the end of this fiscal year. Lessons from that effort are being used in all of Best Buy's stores, Anderson said.

"This quarter was two years in the making," he said on a conference call with analysts.

Sales at U.S. Best Buy stores open at least 14 months, also known as same-store sales, rose 4.5 percent but surged more than 9 percent at "customer centricity" stores, the company said. Canadian locations showed a same-store sales increase of 3 percent, for a companywide average of 4.4 percent.

Best Buy said revenue from movies and music declined, while video games grew solidly, driven by the launch of Sony's PlayStation Portable.

Richfield, Minn.-based Best Buy said it expects to earn 51 cents to 56 cents per share during the second quarter, and it expects a same-store sales increase of 4 percent.

The company's gross profit margin swelled to 25.5 percent of sales from 23.9 percent last year.

Chief Financial Officer Darren Jackson said the higher earnings guidance for the year "reflects a certain degree of conservatism." He said Best Buy might use the extra money to accelerate the changeover to the "customer centricity" format, for opening new stores, and for expanding Best Buy's service business.

Anderson said in an interview that Best Buy didn't raise its guidance even higher because it wants to keep the flexibility to spend those profits on growth, and because they could be wrong — for example, Best Buy saw gross margins slip in the fourth quarter because it bungled the handling of its computer inventory.

"We know we're capable of getting things wrong, and that certainly could happen in the balance of the year," Anderson said. "We're very proud of the last quarter, but that doesn't mean we'll perform as well in the rest of the year."

Best Buy is increasing its market share in the $107 billion consumer electronics industry, "capitalizing on customer migration from its peers and the increasing demand for digital products," Lehman Brothers analyst Alan Rifkin wrote Tuesday.

The company bought back $207 million worth of its stock during the quarter, or more than four million shares. Anderson said that's more than it repurchased during all of fiscal 2005.

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