RadioShack Corp. (NYSE: RSH) shares are climbing over 8% to $29.95 this morning after the company reported first-quarter financial results, posting a nearly five-times increase in net profit, on lower costs and improved margins.
Net income was $42.5 million, or 31 cents per share, from $8.4 million, or 6 cents a share, a year earlier. Charges related to job cuts and other items, increased profits by 2 cents. Even at 29 cents a share, however, the company more than beat analysts' estimates of 14 cents earnings per share. Selling, general and administration expenses fell 17% to $412 million.
On the other hand, revenue dropped 14.5% to $992.3 million and same-store sales dropped 9.2%. The low sales figures is due to weaker postpaid wireless business and fewer company-operated stores and kiosks.
RadioShack's management, and especially CEO Julian Day who was hired to turn the company around, is gaining the trust of the Street. Day, who announced a turnaround plan in February of last year, managed to cut costs and improve profitability substantially as was seen this quarter.
RadioShack's net profit rise fivefold
Posted Apr 30th 2007 10:00AM by Melly Alazraki
Filed under: Major movement, Earnings reports, RadioShack Corp (RSH)
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