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It's extremely tough to survive in the retail consumer electronics space, especially with competitors like Best Buy (NYSE: BBY) and Wal-Mart (NYSE: WMT). Yet, RadioShack (NYSE: RSH) continues to find ways push ahead.
Today, the company released its Q3 report. Revenues came in at $990 million, which was a nice beat on the Wall Street consensus (about $962 million). Net income was $37.4 million, or $0.30 per share, which compares to last year's earnings of $49.1 million, or $0.38 per share. Keep in mind that the company has increased spending on branding (for its new positioning as "The Shack," which appears to be getting traction).
On the earnings news, shares of RadioShack spiked 15% to $18.
Why the success? All in all, RadioShack has made a smart transition to focus on wireless products, such as phones and netbooks. For example, the company recently struck a deal with T-Mobile. There are also key deals with Sprint Nextel (NYSE: S) and AT&T (NYSE: T).
Generally, wireless products have higher margins -- at least compared to laptops and converter boxes.
However, this may be short-lived. After all, Wal-Mart recently announced it will roll-out a discounted mobile service. If successful, it could certainly deflate margins for the industry.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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