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By Ylan Q Mui, Washington Post Staff Writer

Circuit City Stores Inc. yesterday said that sales of flat-panel televisions during the holidays and the Super Bowl helped pump up its fourth-quarter earnings by 65 percent, a significant step in the turnaround efforts of the nation's second-largest consumer electronics retailer.

Revenue grew 13 percent from the comparable quarter a year earlier, to $3.91 billion. Profit in the three months ended Feb. 28 rose to $141.1 million (80 cents a share) from $85.4 million (45 cents). Sales at stores open at least a year jumped 11.6 percent.

Chief executive Philip J. Schoonover called the upswing a "significant improvement." Schoonover, who took the top job at the Richmond-based retailer in December, once worked for rival Best Buy Co. He credited store employees for their role in the turnaround.

"Their ability to execute in a tough competitive environment led to our improved results and will serve as a base to sustain our future growth," he said.

The company also benefited from the boom in online retailing during the holidays, with Web-originated sales jumping 64 percent in the fourth quarter.

Television sales were particularly strong this year, and flat-screen TVs led the way with triple-digit-percentage growth in stores open at least a year, the company said. However, sales of DVD players dropped significantly.

For the fiscal year, the company earned $139.5 million (77 cents), up from $61.7 million (31 cents) the previous year. Revenue increased 11 percent, to $11.6 billion.

Notebook computers, MP3 players and video gaming products all made strong showings.

Circuit City has struggled with management turnover and inefficient inventory management and has trailed Best Buy for a decade.

Last year, Circuit City closed 19 stores, five regional offices and a distribution center -- resulting in layoffs of about 430 full-time and 540 part-time employees -- as part of a major cost-cutting campaign.

Last summer, the company developed a five-year growth plan and began to rebuild by improving employee training and decentralizing decision-making, Schoonover said. The company also said it reduced the number of markdowns, improving its gross profit margin.

This fiscal year, the retailer expects total sales growth of 7 to 11 percent and sales at U.S. stores open at least one year to rise by 5 to 7 percent. Deutsche Bank analyst Michael Baker said the projections are probably conservative, citing the strength of the digital television market. Shares of Circuit City closed at $26.65, up $2.04.

of McLean reported an 11 percent drop in earnings in the first quarter as newspaper advertising revenue declined and newsprint costs increased. Profit for the quarter was $235.3 million (99 cents), compared with $265.7 million ($1.05). Revenue increased 6 percent, to $1.88 billion, largely due to the consolidation of Detroit news operations after last year's acquisition of the Detroit Free Press in a swap with Knight Ridder Inc.

Broadcast revenue increased more than 10 percent, benefiting from the Winter Olympics. But advertising revenue at USA Today, Gannett's flagship newspaper, was down 4.2 percent.

Also yesterday, Gannett's chairman said the company was not participating in the auction of 12 newspapers owned by Knight Ridder that are being sold by Knight Ridder's buyer, McClatchy Co. "We're not involved," Douglas McCorkindale said in response to a question on a conference call. Shares of Gannett closed at $57.76, down $1.06.

of Richmond, which owns newspapers and television stations, mostly in the South, reported a first-quarter profit of $6.7 million (28 cents), compared with a loss of $316.2 million ($13.25) that was mostly related to a $325.5 million charge after Media General changed the way it values broadcast licenses. Revenue rose 4 percent, to $226.4 million. Shares closed at $43.28, down 42 cents.

of Hampstead, Md., which operates a chain of men's clothing stores, reported a profit for its fiscal fourth quarter of $18.5 million ($1.02), up from $12.6 million (71 cents). Revenue for the period ended Jan. 29 rose 28 percent, to $163.8 million.

For the year, the company earned $35.3 million ($1.95), up from $24.5 million ($1.38). Revenue grew 25 percent, to $464.6 million. Shares closed at $43.23, up 61 cents.

Reported By TechNews.com, http://www.TechNews.com

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