RadioShack financial struggles continue: Prepaid wireless sales shine a light

Shares of RadioShack Corp. plunged after the retailer blamed a disappointing quarter on slowing Sprint Nextel Corp. sales.
The Texas-based chain reported a first-quarter net income of $38.8 million, down 8.7% from the $42.5 million during the year-ago period. Total sales fell 4.4% to $949 million and comparable store sales declined 4% from the same period last year.
Lagging sales of Sprint Nextel postpaid services were largely responsible for the downturn, RadioShack executives said, although prepaid services enjoyed strong sales. “We are pleased with the overall outcome for the first quarter of 2008,” said CEO Julian Day, “especially in light of the difficult economic environment.”
RadioShack has struggled mightily in wireless after ditching Verizon Wireless in 2006 in favor of AT&T Mobility. The chain had trouble training staffers during the transition and has suffered in the past year as Sprint Nextel has dealt with increased churn and multibillion-dollar losses.
Shares of RadioShack plummeted $2.39, or nearly 14%, to $15.11 following the news.