(By Salman - iStockAnalyst Writer)

Best Buy Co. (NYSE: BBY)

Best Buy Co. Inc. operates as a specialty retailer in the United States, Canada, Mexico, China, and Europe. It offers consumer electronic video products, such as televisions, digital cameras and accessories, digital camcorders, and DVD players; and audio products comprising MP3 players, navigation products, home theater audio systems and components, and mobile electronics.

Early on Tuesday, electronic retailer Best Buy Co. (NYSE: BBY) announced earnings that exceeded analyst estimates. First-quarter net income totaled $153 million, or 36 cents a share, compared to $179 million, or 43 cents, in the comparable period last year. Revenue rose 12% to $10.1 billion. The first quarter is traditionally the company's smallest sales period of the year. On an adjusted basis, the company earned 42 cents a share, exceeding the average analyst estimate of 34 cents a share. Same-store sales fell 6 percent and the stronger dollar hurt overseas results. However, the company managed to improve its margin even during a severe recession. Gross margin for the quarter rose to 25.3% from 23.7% on the inclusion of Best Buy Europe, which features sales of higher-margin mobile phones, as well as higher margins in digital imaging, home theater and other products in the U.S. Particularly, the home office category held up best in the quarter. Best Buy initiated various cost-cutting measures including job cuts during the quarter. The retailer also reaffirmed its full-year earnings guidance of $2.50 to $2.90 a share.

Best Buy also got a boost from the bankruptcy and subsequent liquidation of its direct rival Circuit City and managed to increase its gain market share. The company said it had gained 2 percentage points of market share in the quarter and that its gains accelerated after the March 8 closing of Circuit City outlets across the U.S. The company is seeking to turn adversity into opportunity and plans to open 13 new stores in the U.S. during its fiscal second quarter. During the first quarter, which began March 1 and ended May 30, the Richfield, Minn.-based company opened eight stores, including a massive store in Chicago's famous Magnificent Mile shopping district. It expects to open about 65 stores during the fiscal year.

Best Buy is also among the retailers selling the much-anticipated Pre smart phone made by Palm Inc. The company is sticking to its plan to double revenue by 2013. Best Buy is market leader in consumer electronics and is well positioned to benefit in the event of a sustained economic recovery.