Tyco Electronics (TEL), the components maker spun off from parent Tyco International (TYC) in 2007, saw its shares jump more than 7% Tuesday after the company boosted its fiscal third-quarter outlook to 10 to 17 cents a share, up from previous guidance of one to six cents a share.

Several factors are contributing to the company s performance. There are better-than-anticipated profits at its undersea cable business. The re-opening of some car manufacturing facilities helped the automotive division. The company also experienced lower tax rates and it says the rising dollar will help push up earnings when the quarter closes on June 26. The company added sales will now come in at an estimated range of $2.45 billion to $2.55 billion, vs. previous guidance of $2.35 billion to $2.45 billion.

Thomas Weisel Partners analyst Matthew Sheerin wrote Monday evening all that were "positive signs of a bottoming in business."

Collins Stewart analyst Brian White raised his rating on the stock to Hold from Sell, writing that "without a major drop-off in revenue and a leaner cost structure, Tyco Electronics' stock may not have much downside potential.

Bottom Line: Hold
The decline in auto manufacturing and the limiting factors of currency and cost cuts make this a wait-and-see story.

La-Z-Boy s Unexpected Profit

Furniture maker La-Z-Boy (LZB) reported a surprise quarterly profit Tuesday.

The Monroe, Mich.-based manufacturer and retailer posted a profit of 10 cents a share for the fiscal fourth quarter, well ahead of the 11 cents a share loss analysts expected. The company lost nine cents a share a year ago.

Although revenue dropped 23% to $284.5 million, and same-store sales fell 16.1% from a year ago, the company's two-year restructuring effort is starting to pay off, even in a brutal recession where consumer spending has plummeted.

"While the furniture industry continues to go through a difficult period, we gained traction and overall are encouraged with our operating performance for the quarter," said CEO Kurt Darrow on a Tuesday conference call.

Brian Sozzi, an analyst with Wall Street Strategies, says the combination of manufacturing plant consolidations, better sourcing, cheaper raw materials and improvements to its retail business managed to boost core operating margins by 300 basis points.

"This company is operating very lean," he says. "It's probably operating the most efficiently of any furniture company I cover."

Darrow said La-Z-Boy trimmed its work force by nearly 25% and plans to close a North Carolina manufacturing plant, suspend its dividend and close weak-performing stores.

The collapse of the housing market may actually create an opportunity for La-Z-Boy if consumer spending picks up, says Sozzi. As people move around less they may spend money fixing up their current homes. "La-Z-Boy has solid brand recognition and inviting midmarket price points, and that ought to become more positive should the economy turn up," he says. "I think there's really pent-up demand for furniture."

Bottom Line: Hold
One good quarter doesn't equal a buy, but its turnaround efforts should offer investors more comfort.

Best Buy s Profits Fall

Best Buy (BBY) profits slipped on restructuring charges but still managed to beat Street estimates. Regardless, the shares fell almost 5% Tuesday.

The Minneapolis-area electronics chain reported earnings of 36 cents a share, including a six-cents-a-share hit due to restructuring charges. It earned 43 cents a share last year. Analysts expected earnings of 34 cents a share.

A drop in videogame sales hit the retailer hard at the end of its fiscal year, but CEO Brian Dunn said the company also gained 200 basis points of market share during the quarter. Best Buy's principal rival, Circuit City, declared bankruptcy last year and liquidated its stores in the first months of 2009.

"Contrary to what some macro industry points may have suggested, said Dunn. We saw significant market share gains during the quarter.

Best Buy also maintained its full-year 2010 earnings guidance of $2.50 to $2.90 a share. Analysts expect, on average, earnings of $2.79 a share for fiscal 2010.

But there is still a long road in front of the retailer. "Best Buy continued to pick up market share in the quarter, but we believe the [comparable sales] weakness implies that Circuit City's demise may not be as much as a boost as we originally modeled," Wedbush Morgan analyst Michael Pachter wrote Tuesday. "Having estimated that Circuit City represented roughly 10% of the market, we implicitly assumed an increase in Best Buy's market share of more than twice the 200 basis points figure."

Stacey Widlitz, at Pali Capital, wrote Tuesday that Best Buy faces the same issue as most publicly traded retailers -- more sales. "In our opinion, going forward, sales trends will be the driver of the stock and cost cuts will receive less credit," she wrote.

Bottom Line: Hold
This news is neither dramatic nor surprising, and is part of the long, grinding recovery from a credit-fueled consumer binge.