Shares of electronics retailer Radioshack (NYSE: RSH) are trading lower in premarket trading after putting up less than impressive earnings this morning.The company was able to slightly come in above analyst estimates, with 30 cents per share compared to the forecast 29 cents per share, but the rest of the report left much to be desired. Compared to its first period last year, earnings were down slightly, as the company was able to show earnings of 31 cents a share last year. Revenue was also lower, by 4.4%.
One area that analysts always look at in judging a company's performance is same-store sales. Radioshack was weak in this area as well, posting a drop of 4% year-over-year. The company blamed this decline on lower demand for its Sprint post-paid wireless contracts and related accessories. Excluding this weak part of its business, Radioshack stated that it would have actually seen a 0.7% increase in its same-store sales.
Another key area of interest is gross margins, and here the company saw another decline. Gross margins were narrowed as a result of three components: increased promotions, lower prices on its GPS units, and a shift from new wireless customers to more upgrades.
In reaction to this morning's report, the stock has been selling off, with shares trading down 1.5% in the premarket. We should get a better idea of just how the stock will do shortly after the market opens.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
The Wal-Mart Weekly: Examining shareholder resolutions, Part 2
Earnings expectations for JC Penney, Nordstrom, Macy's, Abercrombie and others
Comfort Zone Investing: Financial stocks: Is the worst over yet?
