RadioShack (RSH) Posts Surprise Loss in Q2 as Low Smartphone Margins Cut Out Profits
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Price: $4.02 +2.29%
Rating Summary:
0 Buy, 8 Hold, 7 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 28 | New: 13
Rating Summary:
0 Buy, 8 Hold, 7 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 28 | New: 13
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RadioShack Corp. (NYSE: RSH) stock is getting pummeled Wednesday, after reporting a surprise second-quarter loss.
Sales at The Shack rose 1.2 percent to $953.2 million, versus views calling for revs of $971.5 million.
RadioShack swung to a net loss of $21 million, from profit of $23.5 million in the same period last year. On a per share basis, The Shack reported a loss of 21 cents per share, compared with Strett expectations calling for profit of about 4 cents per share.
Gross margin slipped from 45.9 percent down to \37.8 percent, as RadioShack reported a 3.3 percent increase in mobility platform sales. Basically, sales of low margin smartphones clipped profits.
Though RadioShack said its liquidity is about $910 million, it has suspended its dividend program.
Commenting on the company's conference call, CEO Jim Gooch said RadioShack is creating a new app for Google (Nasdaq: GOOG) Android and Apple's (Nasdaq: AAPL) iOS-based iPhone (Gooch also said the Company's margin drop was driven by more iPhone carriers). Its refreshed brand will focus more on mobile moving forward. Margins are expected to remain pressured in the third-quarter, with some easing expected the following quarter. Kiosks at Target (NYSE: TGT) are also expected to be profitable by the end of 2012.
KeyBanc offered some comments Wednesday, following RadioShack's release. The analysis paints an even gloomier picture for RadioShack: sales increase of 1.2 percent missed KeyBanc's 2.5 percent expectation, flat comps fell far shy of the 3 percent gain KeyBanc was modeling. The firm noted that SG&A deleveraging 11 basis points led to a 862 basis point decline in operating margin, to 2.2 percent.
Though KeyBanc had a Neutral rating on The Shack, the firm said estimates were under review until after the conference call.
The movement means UBS may have made the call of the week Tuesday, downgrading RadioShack to Sell and cutting its price target to $3 (from $4.40 prior).
RadioShack is down 26 percent in morning trading.
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Sales at The Shack rose 1.2 percent to $953.2 million, versus views calling for revs of $971.5 million.
RadioShack swung to a net loss of $21 million, from profit of $23.5 million in the same period last year. On a per share basis, The Shack reported a loss of 21 cents per share, compared with Strett expectations calling for profit of about 4 cents per share.
Gross margin slipped from 45.9 percent down to \37.8 percent, as RadioShack reported a 3.3 percent increase in mobility platform sales. Basically, sales of low margin smartphones clipped profits.
Though RadioShack said its liquidity is about $910 million, it has suspended its dividend program.
Commenting on the company's conference call, CEO Jim Gooch said RadioShack is creating a new app for Google (Nasdaq: GOOG) Android and Apple's (Nasdaq: AAPL) iOS-based iPhone (Gooch also said the Company's margin drop was driven by more iPhone carriers). Its refreshed brand will focus more on mobile moving forward. Margins are expected to remain pressured in the third-quarter, with some easing expected the following quarter. Kiosks at Target (NYSE: TGT) are also expected to be profitable by the end of 2012.
KeyBanc offered some comments Wednesday, following RadioShack's release. The analysis paints an even gloomier picture for RadioShack: sales increase of 1.2 percent missed KeyBanc's 2.5 percent expectation, flat comps fell far shy of the 3 percent gain KeyBanc was modeling. The firm noted that SG&A deleveraging 11 basis points led to a 862 basis point decline in operating margin, to 2.2 percent.
Though KeyBanc had a Neutral rating on The Shack, the firm said estimates were under review until after the conference call.
The movement means UBS may have made the call of the week Tuesday, downgrading RadioShack to Sell and cutting its price target to $3 (from $4.40 prior).
RadioShack is down 26 percent in morning trading.
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