Best Buy Co Inc beat quarterly profit estimates as strength in its mobile business offset weak demand for televisions and entertainment software in the all-important holiday season.
But analysts were cautious about the longer term outlook for the company.
The top U.S. consumer electronics chain, which recently announced plans to open about 150 Best Buy Mobile small-format stores in the United States, saw a low double-digit comparable store sales increase in mobile phones even as overall comparable-store sales fell in the fourth quarter.
The retailer is focusing on selling more mobile phone, broadband and TV connections rather than expensive televisions as post-recession U.S. shoppers keep a tight rein on spending amid rising gas prices and high unemployment levels.
Despite the big focus on its profitable mobile business, many raised concerns about Best Buy's long term prospects citing continuing pressure on its ailing TV business.
"It is very difficult for Best Buy to post positive comps when a category that is 20 percent of their sales is comping down double digits," BB&T Capital Markets analyst Anthony Chukumba said.
Net income fell to $651 million, or $1.62 a share in the fourth quarter ended February 26, from $779 million, or $1.82 a share, a year earlier. Excluding items, it earned $1.98 a share, well ahead the analysts' average estimate of $1.85 a share, according to Thomson Reuters I/B/E/S. (For a related graphic, click: http://r.reuters.com/kax68r)
Best Buy shares were down 7 cents at $31.78, reversing course after being up 3 perce