RadioShack posts 3Q earnings slump
FORT WORTH, Texas — RadioShack's transition from offering T-Mobile products and services to offering those of Verizon Wireless took a toll on the company's third quarter profits, though overall sales managed to increase.
RadioShack reported that net sales for the third quarter increased 3% to $1.03 billion, compared with $1 billion for the 2010 third quarter. Net income was $0.3 million, or 0 cents per diluted share, for the 2011 third quarter, compared with net income of $46 million, or 37 cents per diluted share, for the third quarter ended Sept. 30, 2010.
Jim Gooch, president and chief executive officer of RadioShack Corp., said, "The third quarter continued to be a transition period for RadioShack as we prepared for the mid-September launch of Verizon Wireless and phaseout of T-Mobile products and services in our company-owned stores. At the same time, we continued our focus on improving our core business and introducing a more compelling assortment of brands and products to bolster our leadership in the wireless space. Despite the pervasive challenges in the retail economy, we believe we are well positioned to advance our mobility growth strategy in the quarters ahead."
According to RadioShack, net sales were helped by the rollout of the company's Target Mobile centers to 1,490 locations. This increase was partially offset by a $48 million decrease in sales generated by U.S. RadioShack company-operated stores, the company reported.
Comparable-store sales for company-operated stores and Target Mobile centers decreased 4% during the 2011 third quarter, primarily due to the decline in T-Mobile postpaid wireless sales. RadioShack also said lower sales of digital-to-analog television converter boxes and related television antennas and GPS devices also contributed to the decrease in sales. These decreases were partially offset by an increase in postpaid wireless sales of Sprint and Verizon Wireless products and services, and tablet devices.