Carphone Warehouse, Europe's biggest independent mobile phone retailer, raised its profit forecast for the third time in six months on Thursday, boosted by demand for smartphones and its U.S. growth, according to Reuters. Shares in Carphone, which owns 50 percent of a venture with U.S. electricals retailer Best Buy and a 47.5 percent stake in Virgin Mobile France, rose over 1 percent after it said it was continuing to benefit from a strong product cycle. "We are well positioned to continue to capitalise on the rapid development and proliferation of smartphones and the ever-expanding range of tablets coming to the market despite the uncertainty around the economic environment," said Chief Executive Roger Taylor. Carphone raised its forecast for earnings per share in the year ended March 31 to 14.5 to 15 pence from a previous guidance of 13.5 to 14 pence, despite anticipated big losses at its new UK megastores. Shares in Carphone, which have outperformed the STOXX Europe 600 retail sector index by 95 percent over the past year, were up 5.5 pence at 407 pence at 0822 GMT, valuing the business at about 1.82 billion pounds ($3.01 billion). "Carphone Warehouse continues to benefit from higher value smartphones offset by a decline in prepay volumes even through a tough economic environment," said analysts at Credit Suisse. The company's venture with Best Buy -- called Best Buy Europe -- includes Carphone's mobile phone stores, the new chain of Best Buy-branded electricals megastores and a profit sharing agreement on Best Buy Mobile shops in the U.S.. At the European mobile stores, like-for-like sales fell 1.7 percent in the fourth quarter ended March, compared with analyst forecasts of flat to down 2 percent in a Reuters poll of five. That compares favourably with a 4 percent decline reported by Metro AG's Media-Markt Saturn business, Europe's biggest electricals retailer, on Tuesday. Electricals groups Kesa and Dixons will publish updates next week. Both have issued profit warnings in recent months as shoppers across Europe struggle with rising prices and austerity measures. Carphone said connections at Best Buy Mobile rose 25.9 percent to 1.8 million, compared with analyst forecasts of a rise of 25-33 percent. The company forecast its share of profits from this business towards the top end of a 90-100 million-pound range. Virgin Mobile France recruited a net 161,000 new customers, well ahead of expectations. Best Buy Europe currently trades from eight UK megastores, with a further three scheduled to open in the summer. Some analysts believe the UK consumer electricals market is overcrowded and think the joint venture should withdraw from megastores. Taylor conceded there were "a range of views" amongst analysts and reiterated that Carphone and its American partners will outline their long term plans for the business in June. "We'll talk about our entire strategy for it. What level of investment we make, what level of return we expect to make, what we see the store formats as, how we see it evolving," he told Reuters.
