RadioShack Misses Earnings, Revs

Zacks

RadioShack Corp. (RSH) posted weak third-quarter 2013 financial results. Notably, the comparable store sales for the company-operated stores and kiosks (stores and kiosks that have been operational for at least a year) were down 8.4% in the reported quarter. This is a key retail performance indicator measuring growth from the existing sales locations.

GAAP net loss from continuing operations in third-quarter 2013 was $112.4 million or a loss of $1.11 per share compared with a net loss of $47.1 million or a loss of 47 cents per share in the year-ago quarter. Reported loss per share was significantly higher than the Zacks Consensus Estimate of a loss per share of 37 cents. The total revenue was $805.4 million, down 10.3% year over year and also below the Zacks Consensus Estimate of $896 million.

Quarterly gross profit was $242.7 million versus $340.8 million in the prior-year quarter. Gross margin was 30.1% compared with 37.9% in the comparable year-ago quarter. Selling, general, and administrative expenses were $343.3 million against $354 million in the previous-year quarter. Operating loss was $118 million compared with $34 million in the year-ago quarter.

During the first nine months of 2013, RadioShack generated $175.6 million in cash from operations compared with $32.4 million in the year-ago period. Free cash flow, in the reported period, was $149 million against a negative $12.1 million in the prior-year period.

At the end of the third quarter of 2013, RadioShack had $316.4 million in cash & cash equivalent compared with $546.1 million at the end of third-quarter 2012. Total debt, at the end of the reported quarter, was $498.3 million versus $474 million at the end of the previous-year period. The debt-to-capitalization ratio was 0.56 compared with 0.42 at the end of the third quarter of 2012.

Segment Results

U.S. RadioShack Company-operated store segment, which is the prime contributor to the total revenue, was down 9.9% year over year to $733.9 million. Operating loss was $26.5 million, down 142.7% from the prior-year quarter. Other segment revenues decreased 14.5% year over year to $71.5 million. Operating income was $1.6 million, down 84.2% from the year-ago quarter.

RadioShack currently has a Zacks Rank #3 (Hold).

Other Stocks to Consider

Other stocks in the electronics retail industry worth a look are hhgregg Inc. (HGG), Conns Inc. (CONN) and GameStop Corp. (GME). Both, hhgregg Inc. and GameStop Corp. have a Zacks Rank #2 (Buy) while Conns Inc. has a Zacks Rank #3 (Hold).

Read the Full Research Report on RSH
Read the Full Research Report on GME
Read the Full Research Report on HGG
Read the Full Research Report on CONN


Zacks Investment Research

View Comments (0)