DOW JONES NEWSWIRES
RadioShack Corp. (RSH) reported an 11% increase in first-quarter
net income on higher sales as the consumer-electronics retailer
smashed analysts' expectations.
The company cited strength in its wireless business and of
selling digital converter boxes which will be needed no later than
June to watch over-the-air television.
"We are very pleased with the results," said Chairman and Chief
Executive Julian Day.
The results follow a weak fourth quarter, when net income
dropped a bigger-than-expected 39% on falling margins, consumers
shifting away from higher-margin cellphone activations and weak
sales of some product categories.
RadioShack has been seeking a way to be relevant as companies
such as Best Buy Co. (BBY) and Wal-Mart Stores Inc. (WMT) take
increasing market share on the consumer-electronics space. The
company is renovating most company-owned stores and taking steps
such having an electronics trade-in program in those locations.
RadioShack posted first-quarter net income of $43.1 million, or
34 cents a share, compared with $38.8 million, or 30 cents a share,
a year earlier.
Revenue increased 5.6% to $1 billion.
The mean estimates of analysts surveyed by Thomson Reuters were
earnings of 22 cents and revenue of $937 million.
Same-store sales climbed 5% - the increase would have been 6.2%
absent an extra day a year earlier - and online sales jumped
28%.
Gross margin fell to 46.7% from 47.4%. But operating margins
rose to 8% from 6.8% - the highest figure in four year - as
overhead costs held steady despite the sales gains.
Cash levels were more than double year-earlier levels as of
March 31 while inventories dropped 13%.
Shares closed Wednesday at $10.80 and were inactive premarket.
The stock is down 46% since September but has jumped two-thirds
since hitting a 16-year low last month.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com