RadioShack's Days May Be Numbered


RadioShack Corp. (NYSE: RSH) reported third-quarter 2012 results before markets opened this morning. The electronics retailer posted a net loss of $0.47 per share on revenues of $1 billion. In the same period a year ago, the company reported earnings per share (EPS) of $0.15 on revenues of $1.03 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for a net loss of $0.16 per share and $1.04 billion in revenues.

On a GAAP basis, the company reported a net loss of $0.33 per share.

The company's interim CEO said:

Overall, our business performed below expectations. I am most disappointed in our post-paid mobility business where we saw a continued decline in margin performance. However, I am pleased with the progress we are making in improving and driving growth in our high-margin Signature platform, which generated its third consecutive quarter of sales growth and our pre-paid mobility business, which included the launch of the RadioShack branded line of phones. Importantly, we took action to reduce our overall SG&A cost structure during the quarter.

The company did not offer any information on its outlook for the fourth quarter or the full year. The consensus estimates call for fourth-quarter EPS of $0.12 on revenue of $1.4 billion. For the full year, the consensus estimate calls for a net loss of $0.33 per share on revenue of $4.39 billion.

It is really not good news that the only thing that RadioShack wanted to explain in any detail in this quarterly report was its cash position and its debt load. The company did mention that capital spending is $18 million below last year's capex spending. That is not good news either.

RadioShack's shares were down about 16.3% in premarket trading at a new low of $2.00, in a current 52-week range of $2.01 to $13.94. Thomson Reuters had a consensus analyst price target of around $2.67 before today's report.

Paul Ausick