Circuit City Posts Surprise Profit of $4.85 Million
Circuit City Stores reported a small fourth-quarter profit Wednesday compared with a loss that Wall Street expected, sending its shares up 7.1 percent in premarket trading.
But the electronics retailer said it is facing the "toughest macroeconomic environment in years," and it forecast a wider first-quarter loss from continuing operations compared with a year ago.
Circuit City, which faces pressure from industry investor Mark Wattles to oust its chief executive officer, reported a profit of $4.85 million, or 3 cents a share, for its fiscal fourth quarter ended Feb.
29, compared with loss of $4.25 million, or 3 cents a share, a year earlier.
Analysts, on average, had been expecting a loss of 8 cents per share, according to Reuters Estimates, but it was not immediately clear whether analysts accounted for a goodwill impairment the company included in its results.
Sales fell 7.7 percent to $3.65 billion from $3.95 billion.
Circuit City has posted losses and seen its stock price tumble to multiyear lows in the past year as the U.S.
economy slowed, and it made store changes that disrupted business and hurt sales of higher-margin products like extended warranties.
The company faces a proxy fight from Wattles, who has called for the immediate ouster of Chief Executive Philip Schoonover and has nominated five people for election to the board at this year's annual meeting.
Last week, main rival Best Buy Co reported lower but better-than-expected quarterly profit and forecast higher earnings for the coming year.
For the first quarter, Circuit City expects to record a loss from continuing operations before income taxes of $180 million to $195 million, compared with a loss of $82.5 million in the comparable quarter a year ago.
Electronics retailer Circuit City Stores reported a surprising fourth-quarter profit Wednesday compared with a loss a year earlier when it took a charge to close stores.
Circuit City , which faces pressure from industry investor Mark Wattles to oust its chief executive officer, reported a profit of $4.85 million, or 3 cents a share, compared with loss of $4.25 million, or 3 cents a share, a year earlier.
Analysts had expected the company to lose 10 cents a share. Shares gained 2.2 percent in premarket trading.