Sept. 18 (Bloomberg) -- Best Buy Co., the largest consumer- electronics retailer, reported an unexpected rise in profit and increased its yearly earnings forecast on computer and international sales. The shares had their biggest gain in a year.

Net income increased to $250 million, or 55 cents a share, for the second quarter ended Sept. 1, Richfield, Minnesota-based Best Buy said today in a statement. The retailer also said it acquired a 3 percent stake in Carphone Warehouse Group Plc, Europe's top wireless merchant.

Revenue gained 15 percent to $8.75 billion, topping analysts' estimates, giving Best Buy optimism heading into the holiday shopping season. The retailer said it gets 70 percent of profit in the second half. Sales from stores outside the U.S. jumped 54 percent.

``Best Buy has very good cost controls in place in an uncertain consumer environment,'' said Craig Nedbalski, who helps manage $21.5 billion in assets at Cincinnati-based Fifth Third Asset Management. ``They've been taking market share from their competitors and they continue to be the market leader.''

Best Buy rose $2.92, or 6.6 percent, to $47.46 at 4:01 p.m. in New York Stock Exchange composite trading for the largest advance since Sept. 12, 2006. The shares dropped 9.5 percent this year before today, compared with a loss of 47 percent for Circuit City Stores Inc., the second-biggest consumer-electronics chain.

Carphone Stake

The retailer said paid it $183 million for the Carphone Warehouse stake on the same day Apple Inc. announced Carphone would sell iPhones in the U.K. Apple expects to sell 10 million of the phones worldwide in 2008.

``We wouldn't be unhappy selling iPhones,'' Chief Executive Officer Brad Anderson said in an interview. ``That's about all I can say right now.'' He declined to be more specific or say whether Best Buy would sell the iPhone.

Best Buy and Carphone have a partnership, operating Best Buy Mobile in the U.S. and Geek Squad, Best Buy's technical services unit, in London. Carphone Warehouse shares rose the most in more than three months today.

Best Buy has taken market share from Circuit City with better locations and higher ratings on customer-satisfaction surveys.

Analysts estimated profit of 44 cents a share, the average of 23 projections compiled by Bloomberg, while 16 predicted revenue of $8.46 billion. Analysts estimated sales of $8.46 billion. A year earlier, Best Buy had profit of $230 million, or 47 cents.

Profit this year will be $3 to $3.15 a share, up from an August forecast of $2.95 to $3.15. Jim Muehlbauer, senior vice president of finance, said Best Buy expects results will be in the upper half of the range. Analysts estimate $3.02.

`Balanced' Optimism

``Our optimism is balanced by fact that 70 percent of earnings are still ahead of us in the year in a volatile macro environment,'' Muehlbauer said on a conference call with analysts and investors.

Selling, general and administrative expenses narrowed to 19.9 percent of revenue from 20.7 percent after a full quarter of results from Best Buy's stores in China.

The results are a ``testament to Best Buy's strong execution and ability to course-correct rapidly,'' Colin McGranahan, an analyst with Sanford C. Bernstein, wrote in a research note today.

Same-store sales rose 3.6 percent. Mitch Kaiser, an analyst with Piper Jaffray & Co. in Minneapolis, estimated sales in stores open at least 14 months would rise 2.9 percent. McGranahan estimated a 2.6 percent gain. Same-store sales are a key measure of a retailer's health, since they exclude new or closed locations.

International Gains

Same-store sales in Best Buy's international unit, gained 16.3 percent. The division, which includes Canada and China, accounts for 17 percent of sales.

``The Canadian economy is hot right now, and the U.S. is not,'' Anderson said. ``There's a marked difference in terms of how the consumer is responding and the pressures on U.S. consumers we're feeling in our business.''

Comparable U.S. sales added 1.7 percent on sales of laptop computers. Most U.S. schools start in August and September, spurring sales of supplies.

Analysts favor purchasing Best Buy shares over Circuit City. Sixteen analysts suggest buying Best Buy shares and 11 say ``hold.'' Circuit City shares are rated ``buy'' by five analysts, 18 say ``hold'' and two suggest selling.

To contact the reporter on this story: Mark Clothier in Atlanta at mclothier@bloomberg.net

Last Updated: September 18, 2007 16:16 EDT