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Circuit City sees 3Q up 45%
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December 4, 1998: 12:47 p.m. ET
Electronics retailer says sales jumped 22%; strong earnings are forecast
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NEW YORK (CNNfn) - Circuit City Stores Inc. said Friday its third-quarter sales grew more than 20 percent as personal computers flew off the shelves.
The consumer electronics retailer also told Wall Street it expects earnings for its retail stores to soar nearly 50 percent when quarterly financial results are released later this month.
The news didn't do much for either of the company's stock series, however.
Circuit City Group (CC) shares were off 5/16 at 35-11/6 at mid-day on the New York Stock Exchange. The company's other stock series, CarMax Group (KMX), was off 5/16 at 5-5/16.
(Click here for a chart of Circuit City Group's stock activity)
(Click here for CarMax's stock activity)
For the fiscal third quarter, ended Nov. 30, sales rose 22 percent to $2.61 billion from $2.14 billion a year ago.
That, according to the company, should translate into a whopping 46 percent earnings jump for Circuit City retail stores. Results are due out Dec. 18.
The Richmond, Va.-based company said sales for the Circuit City Group (CC) rose 18 percent to $2.27 billion.
Total sales for the CarMax Group (KMX) were up 52 percent at $345.6 million, but same-store sales declined 4 percent.
"Circuit City sales continued at a healthy pace, with strong performances in personal computers, wireless communications and DirecTV," said Richard L. Sharp, chairman and CEO. "The holiday season started well, and we are optimistic that our sales will continue to meet or exceed our expectations as they have throughout the year."
Moreover, he said, the company's Circuit City division will contribute about 38 cents a share to Circuit City Group's third-quarter earnings, and its investment in Digital Video Express LP will lower results by about 17 cents a share.
The CarMax Group is expected to translate into a loss of about 8 cents a share.
Analysts said Circuit City's optimistic earnings growth is on track with their expectations.
"I think they are in a pretty good position," said Argus Research analyst Alan Mak. "Their personal computers are doing pretty well and there's a boom in hand-held digital devices now. Their DirectTV is doing well, too."
He noted that the CarMax division has been weighing down Circuit City's results, but said electronic sales should offset those declines.
Circuit City Stores Inc. operates 533 Circuit City Superstores, four consumer electronics-only stores, 50 mall-based Circuit City Express stores and 26 CarMax superstores, including one free-standing new-car location. 
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Circuit City
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