Best Buy posts earnings of 37 cents a share vs. 29 cents expected

Best Buy
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Best Buy reported quarterly earnings and revenue that topped analysts' expectations on Thursday, helped by strong demand for large-screen TVs, smartphones and appliances.

Shares of Best Buy were sharply higher in premarket trading following the report. (Get the latest quote here.)

Best Buy said its revenue growth in the United States was driven by sales of mobile phones bundled with billing plans by telecom carriers. Under these plans, telecom carriers allow customers to buy new phones for a low down payment and pay the remaining amount in installments along with monthly bills.

Best Buy also benefited from selling more high-margin computer hardware and fewer low-margin tablet computers, the company said.

Best Buy's revenue from the United States rose 1.4 percent to $7.9 billion in the first quarter. However, the company's same-store sales fell 0.7 percent.

The company said it expected "a flat to positive low-single digit revenue growth rate" in its U.S. business and "a flat to negative low-single digit revenue growth rate" in its overall business.

The total revenue growth forecast includes the impact of some store closures and consolidation of operations in Canada, the company's second largest market.

The net income attributable to Best Buy's shareholders fell to $129 million, or 36 cents per share, in the first quarter ended May 2 from $461 million, or $1.31 per share, a year earlier.

Excluding items, the company earned 37 cents per share.

Revenue fell 1 percent to $8.56 billion.

Analysts had expected a profit of 29 cents per share and revenue of $8.46 billion, according to Thomson Reuters I/B/E/S.

Comparable-store sales were up 0.6 percent, compared to consensus estimates of a 0.1 percent increase.

Best Buy shares have fallen more than 10 percent since March 30, two days after the company announced the consolidation of its Canadian units known as Future Shop, leading it to cutting about 500 full-time jobs and approximately 1,000 part-time jobs.

Still, the retailer's stock remains up about 36 percent in the last year.

CNBC's Terri Cullen and Reuters contributed to this report.

CORRECTION: This story was updated to reflect that the year ago revenue was $8.639 billion.