MINNEAPOLIS — Best Buy Co., the nation's largest consumer electronics retailer, announced yesterday a new $5.5 billion stock buyback program, a dividend increase and plans to add 400 stores in North America.

Best Buy shares rose 3.7 percent yesterday and closed at $46.67.

The moves came a week after the company reported disappointing first quarter earnings and revised its profit forecast downward for fiscal 2008.

The company said it would use part of the new buyback for the repurchase of $3 billion worth of stock no later than February 2008. The remaining $2.5 billion will be used subject to business conditions.

Analysts applauded the move. The only negative, according to BMO Capital Markets analyst Rick Weinhart, is that Best Buy will no longer have a large cash reserve if the industry or the company's finances falter. Still, he raised his 2008 earnings forecast by 10 cents, to $3.05 per share. The company predicts a range of $2.95 to $3.15 per share.

Before yesterday's announcement, Best Buy shares had been trading nearer the lower end of their 52-week range of $43.51 to $58.49.

The new stock repurchase plan replaces a $1.5 billion buyback, which was announced in June 2006. Best Buy had 473.9 million shares outstanding as of June 2.

The company has already repurchased $462 million in shares to date, and the company intends to repurchase nearly $3.5 billion of stock in fiscal 2008.

"Best Buy said it expected the buyback program to have a "modest benefit" on fiscal 2008 earnings per share. The lower share count will be offset by lower interest and investment income due to smaller cash and investment balances and interest payments on borrowing.

The company board also announced its plan to raise the regular quarterly dividend by 30 percent to 13 cents per share. If authorized, the company will pay the dividend on Oct. 30 to shareholders of record Oct. 9.

The retailer also said it plans to open 1,800 stores in the United States and Canada, up from its prior plan of 1,400 stores. The new total assumes 1,400 superstores, up from 1,000 in the previous plan.

A Best Buy spokeswoman said the company would not provide timelines or other details about its expansion plans.

Best Buy operates 852 Best Buy stores domestically, 47 Canada Best Buy stores, 122 Canada Future Shop stores and 14 Pacific sales stores.

The company also restated its commitment to its expansion into China. Company officials said lower margins in the China operations contributed to the company's missing first quarter earnings targets.