RadioShack Confirms 2005 Profit Shortfall
Thursday, January 12th 2006, 9:47 am
By: News On 6
FORT WORTH, Texas (AP) _ The electronics retailer RadioShack Corp. on Thursday reaffirmed its 2005 earnings will miss its goal even as it reported total sales rose 5 percent in the fourth quarter, including 4 percent growth at stores open at least one year.
Its shares dropped 74 cents, or 3.4 percent, to $21.06 in premarket trading.
The company its earnings for the year will not reach its goal of $2.14 to $2.24 per share. It had said in December that it was ``unlikely'' to meet its profit expectations for the year. Analysts expect RadioShack to earn $1.69 per share, excluding items.
RadioShack said total sales for the fourth quarter climbed to $1.67 billion from $1.59 billion a year earlier. Analysts forecast sales of about $1.65 billion, according to a Thomson Financial survey.
``We drove strong sales in satellite radio, MP3 players, and digital imaging _ three of the categories on which we focused our resources the most during the holiday season,'' said David Edmondson, president and chief executive, in a statement. ``Sales results were higher in these low-margin non-wireless categories; however, we also experienced lower sales in high-margin categories.''
The company said its wireless business was hurt at core stores due to its transition from Verizon Wireless. RadioShack signed wireless deals with Sprint PCS and Cingular Wireless in August.
Full year same-store sales increased 1 percent, while total sales grew 5 percent to $5.08 billion from $4.84 billion.