Thursday, April 28, 2005
Circuit City Says 4th-Quarter Profit Declines to $85.4 Million
The #2 electronics chain, said fourth-quarter net income declined to $85.4 million as it closed 19 stores and changed accounting for leases. Net income fell to 45 cents a share from $89.6 million, or 43 cents, a year earlier, the Richmond, Virginia-based company said today in a statement distributed by PR Newswire.
...Circuit City closed the stores, five offices and a distribution center after receiving a $3.25 billion takeover offer from Highfields Capital Management LP, the company's third- largest investor.
..."They still have a long way to go and they're still a long way behind Best Buy," said David Campbell Jr., an analyst with Richmond, Virginia-based Thompson, Davis & Co.
...During the past year, he sold off the company's private- label credit card business, which was hurt by rising defaults, and bought Canada's InterTan Inc. consumer electronics chain to gain access to private-label products.
The company's board on March 7 rejected the $17-per-share offer from Boston-based hedge fund Highfields, saying shareholders were better served by the company's plans to boost profits by cutting costs and making store improvements.
"They're going to have to show a fairly good performance or they're going to have another entity knocking on their door offering to buy them out," Phil Grodnick, who helps manage $200 million including Circuit City shares at Minneapolis Portfolio Management of Minneapolis, said before the announcement.
On a side note: I visited a Conn's store this morning. I could see how it could give Circuit City addtional worries.
...Circuit City closed the stores, five offices and a distribution center after receiving a $3.25 billion takeover offer from Highfields Capital Management LP, the company's third- largest investor.
..."They still have a long way to go and they're still a long way behind Best Buy," said David Campbell Jr., an analyst with Richmond, Virginia-based Thompson, Davis & Co.
...During the past year, he sold off the company's private- label credit card business, which was hurt by rising defaults, and bought Canada's InterTan Inc. consumer electronics chain to gain access to private-label products.
The company's board on March 7 rejected the $17-per-share offer from Boston-based hedge fund Highfields, saying shareholders were better served by the company's plans to boost profits by cutting costs and making store improvements.
"They're going to have to show a fairly good performance or they're going to have another entity knocking on their door offering to buy them out," Phil Grodnick, who helps manage $200 million including Circuit City shares at Minneapolis Portfolio Management of Minneapolis, said before the announcement.
On a side note: I visited a Conn's store this morning. I could see how it could give Circuit City addtional worries.
# posted by Lynn Wegley @ 1:58 AM 
