FORT WORTH, Texas-Disappointing wireless sales likely will prevent RadioShack Corp. from meeting its full-year earnings forecast, the retailer said.
Calling its wireless sales “weaker than anticipated,” RadioShack said it is unlikely to meet its fiscal 2005 target of $2.14 to $2.24 per share. But the nation’s No. 3 U.S. consumer electronics chain reiterated previous cash flow guidance of $80 million to $100 million for the full year, citing improved outlook for working capital during the fourth quarter.
“We have made significant progress in executing our improvement initiatives this year,” said Chief Executive Officer David Edmondson, “yet it’s clear that we need to move much faster, more aggressively and with more urgency to enhance company performance.”
Shares of RadioShack dipped on the news, sliding $1.47 to $22.25 in mid-day trading Friday on the New York Stock Exchange.
RadioShack is the second-largest national reseller of wireless service, according to research from Telephia, teaming with top-selling Wal-Mart to account for 60 percent of total market share among major retailers for mobile device purchases. But while the company may be losing customers to carrier-owned outlets, it’s likely a change in offerings is to blame for the sluggish sales, according to Bear Stearns.
“While RadioShack is a large retailer for Sprint, (it) is transitioning Verizon Wireless out of its stores this month, which is probably the biggest disruption to sales,” the firm wrote in a research note. “RadioShack expected some Verizon Wireless disruption in its previous guidance.”
