RadioShack’s (RSH) troubles seem far from over. The consumer electronics retailer’s losses continued to pile up in the first quarter, raising concerns about whether or not the company could survive despite its turnaround efforts.
RadioShack reported a much wider-than-expected loss of $98.3 million dollars or $0.97 a share as sales tumbled for the ninth consecutive quarter. Revenue fell 13% from a year ago to $736.7 million, missing estimates.
RadioShack CEO Joseph Magnacca said the company is "making progress" in turning itself around. The company has a pipeline of new products, and it has also been cutting costs and remodeling stores.
Yahoo Finance Senior Columnist Michael Santoli said the retailer continued to burn through cash last quarter and investors are skeptical if they can make it past this year. RadioShack would have to raise new capital or do something dramatic to be able to pull through, he said.
RadioShack had about $424 million in liquidity in the first quarter, including nearly $62 million in cash and close to $362 million available on its credit line. Santoli said the company’s creditors still hold a lot of the cards and RadioShack is still at their mercy.
RadioShack scrapped plans to close up to 1,100 stores last month because it was not able to reach an agreement with its lenders. The company now plans to only close 200 stores by the end of its current fiscal year in January.
RadioShack shares tanked this morning. Santoli was not suprised with the markets reaction. “This is how outdated retailers tend to be treated in the market, when they get to this point, of kind of losing their purpose for existing."
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