RadioShack Climbs After Q4 Earnings
RadioShack (NYSE: RSH) has seen its business deteriorate over the years as the company has had a difficult time competing with the likes of Amazon.com (NASDAQ: AMZN) and Best Buy (NYSE: BBY). RadioShack's market cap has dwindled to just over $300 million as the stock has lost around 56 percent over the last year and almost 80 percent in the last five years.
The stock is rising on Tuesday, however, after gapping lower at the open. In mid-day trade, the shares were last up better than 3 percent. The catalyst for the activity in the name is the company's Q4 earnings results, which were released prior to the opening bell.
For the fourth-quarter, RadioShack posted a net loss versus a profit last year. The company's CFO Dorvin Lively said "Overall, the fourth quarter continued to be impacted by challenges similar to those of the first three quarters of the year. The most significant contributing factor to the decline in our performance was the postpaid wireless business which saw a decline in transaction volume across the year, combined with a lower margin rate.''
For the period, RadioShack reported a net loss of $63.3 million or $0.63 per share, versus a profit of $11.9 million or $0.12 per share, in the year ago period. The loss was largely due to deferred tax charges. Heading into the quarter, Wall Street analysts had consensus EPS estimates of $0.05.
Net sales in the period were $1.296 billion, a decline versus the $1.387 billion that the company reported last year. The results missed analysts' consensus sales estimates of $1.36 billion.
Weakness was also evident in comparable store sales at RadioShack, which fell seven percent in the fourth-quarter. For the full-year, the company reported a net loss of $139.4 million or $1.39 per share, compared to a profit of $72.2 million or $0.70 per share in fiscal 2011. Revenue fell from $4.378 billion to $4.258 billion.
RadioShack is a distressed company that has been the subject of private equity takeover rumors in recent years. Investors looking to make money in the stock should focus on valuation as the operational future of the business is not compelling. Shares have been falling on a near-constant basis for two years, although RSH is up 61 percent over the last three months.
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