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RadioShack Announces 88% Earnings Miss In Report

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RadioShack (NYSE: RSH) shares are ready to slump lower following a big earnings miss Tuesday morning.

Revenue for the first quarter was 4.01 percent below the analyst consensus at $736.7 million versus $767.45 million. Year-over-year, earnings are down 13.2 percent, led by store closings and a 14 percent drop in comparable sales. RadioShack expects to close up to an additional 178 stores.

Earnings slumped to a $0.98 loss per share, versus the $0.52 drop expected by Wall Street; this is an 88.5 percent miss. Earnings are down 180 percent year-over-year. The accelerated drop in income is in part due to cost of goods sold as a percentage of sales rising to 63.5 percent versus 59.8 percent.

Selling, general and administrative costs actually rose, despite the downturn in revenue.

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The balance sheet is not in too bad of shape, with the current ratio at 2.36 and $61.8 million on the balance sheet.

In the press release, CEO Joseph Magnacca emphasized that the company is making progress on its turnaround, but, “first quarter performance was challenged by an industry-wide decline in consumer electronics and a soft mobility market which impacted traffic trends throughout the quarter.”

Most importantly, Magnacca emphasized that Radio Shack’s concept stores have been growing quickly and that the company has started its 100 store remodeling effort.

Shares of RadioShack are currently trading down 14.2 percent to $1.32 in Tuesday’s pre-market. Volume has been light, indicating that more selling is possible.

Posted-In: Joseph MagnaccaEarnings News Hot


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