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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 same-store sales fell in the fourth quarter.</p>
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The retailer is now 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.</p>
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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.</p>
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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.</p>
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"The stock appears to be getting a 'better than feared' reaction," JPMorgan analyst Christopher Horvers said.</p>
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"Given the lack of sales visibility and little reason to be optimistic before easy back-half comparisons, the arrival of more competitive tablets, and a labor market rebound, there isn't much else to hold on to for the next two quarters that can put a significant dent in the secular bear case."</p>
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Best Buy, whose decision to focus on promoting pricier televisions backfired, has consistently lost bargain-hungry shoppers to online retailer Amazon.com Inc and mass merchants such as Target Corp and Wal-Mart Stores Inc.</p>
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Best Buy advertised cheaper TVs later in the season, but its December same-store sales still fell 4 percent.</p>
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Same-store sales fell 4.6 percent in its fourth quarter, including a 5.5 percent decline at its U.S. stores open at least 14 months.</p>
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Wedbush analyst Michael Pachter was looking for a 2.2 percent same-store sales decline in the fourth quarter, including a 3 percent decline at its U.S. stores open at least 14 months.</p>
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For fiscal 2012, the company sees earnings of $3.30 to $3.55 a share, excluding previously announced restructuring charges and potential share repurchases.</p>
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Best Buy shares were up 3 percent in premarket trading.</p>
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(Editing by Dave Zimmerman)</p>
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