RadioShack's 3Q Net Up 2.5%
By Alan Wolf -- TWICE, 10/28/2002
FORT WORTH, TEXAS — RadioShack's net income rose $1.1 million, or 2.5 percent to $44.9 million for the third quarter ended Sept. 30.
The gains came despite a 3 percent decline in sales to nearly $1.05 billion and flat same store revenue during the three-month period.
Wireless sales, however, bucked the trend by increasing nearly 9 percent for the quarter.
Chairman/CEO Len Roberts attributed the earnings gains — plus a 114 basis point increase in gross margin to 49.8 percent — to "effective management of our working capital, while generating a respectable level of same store sales and free cash in a tough operating environment."
In August RadioShack lowered its third quarter outlook from a previous forecast of 2 percent to 3 percent sales growth and earnings of 33 cents per share. Its actual net of 25 cents a share beat analyst expectations by a penny, boosting the company's share price by more than 5 percent following the announcement.
On an adjusted basis, which excludes $8.3 million in charges for layoffs and other costs during the year-ago period, net income fell $7.2 million or 13.8 percent for the third quarter.
Looking ahead, RadioShack anticipates earnings of 63 cents to 68 cents per share for the fourth quarter, compared to 67 cents last year, and annual per share earnings growth of 13 percent to 15 percent from 2003 through 2005.
The company bases the latter projection on sales growth of 2 percent to 3 percent over the three years, plus gross margin improvement and a share-buyback program.
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