Shares of electronics retailer RadioShack (NYSE: RSH) are soaring this morning after the company shattered its estimates for its second quarter numbers.Going into this morning's earnings announcement, analysts had been expecting to see the company show earnings of 26 cents per share, but the company shocked everyone by coming in well above those estimates, with a reported 35 cents per share for the quarter. Wall Street is rewarding the stock nicely this morning, pushing shares up over 14% in early morning trading.(See more of today's earnings news).
While the company was able to show a nice increase in sales, it did caution investors that the current economic condition is challenging, and that it expects this to remain the case for the foreseeable future. It has been tough for RadioShack recently to compete with stronger rivals such as Best Buy (NYSE: BBY), but the company showed good signs of life during the quarter by posting a 6.4% increase in sales. This is a very good sign for the company, which has been struggling the past several quarters.
Same store sales rose by a very respectable 6.9%, but what is even more impressive is the 29.% increase in sales that the company was able to achieve from its online business. RadioShack stated that its strong same store sales figures were a result of good performance in GPS devices and prepaid wireless phones.
Revenues were also very impressive in the quarter, with a reported $995 million, substantially higher than the $908.54 million that analysts had been expecting to see from the company.
In addition to the strong earnings and revenues figures, the company also announced that it had approved a new $200 million buyback plan.
Is this a sign that RadioShack is all of a sudden coming back to life? I am not sure I would go quite that far just yet. The company still has many hurdles that it has to overcome, mainly its stiff competition with Best Buy which has been growing and gobbling up market share at a feverish pace over the past few years. Whatever the future holds for RadioShack, today's news is a great starting point for the company, and I personally hope that we see the company continue to build on today's success and make more strong moves in the future.
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.
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Reader Comments (Page 1 of 1)
7-24-2008 @ 12:35PM
dr.sausage said...
i'm surprised they are still in business.walk into most stores and try to buy an i.c. or a transistor.