RadioShack Corp. (RSH) Rebounds Despite Posting Losses North of Expectations
Northern, WI 04/23/2013 (GDPInsider) – RadioShack Corp. (RSH) opened trading at $2.99 and is currently beating expectations by holding its own 5.10% above the day’s previous close of $3.14. Analysts are dumbfounded because the company at its most recent earnings call failed to deliver much good news on its Q1 operations.
According to the earnings statement, adjusted earnings per share dropped to $-0.35 compared to adjusted EPS of $-0.08 in the corresponding quarter last year. The biggest disappointment for many, however, was the 15.8% decrease in revenues. The company reported Q1 revenues of $849 million. Wall Street has expected revenues of $963.97 million. RadioShack’s stock price has been down 47% for much of the past year and the company’s net loss took a major plunge over the 12 months leading to this reporting quarter. At the end of Q1 2012 net loss was $8 million; this figure jumped to a disappointing $43 million for the current quarterly reporting period.
Understandably management at RadioShack is keen to play damage control and CEO, Joseph C. Magnacca was quick to lay out his thoughts on the results. “In the few weeks that I have been with the company, I have distilled several key learnings that have led me to focus on an initial set of priorities to begin driving our turnaround: building the right management team, reinvigorating the store experience, and jumpstarting our powerful brand,” said Magnacca.
There’s also some confidence in Magnacca’s ability to turn things round among analysts and this seemed to have fed into the sentiment of the market. Janney Capital’s David Strasser is one analysts that has been quite vocal in Magnacca’s defense. “The numbers today stink, but they are not (the new CEO’s) making,” said Strasser.
The market it seems took some sympathy with Magnacca’s thinking because the stock has rebounded quite well. Presently the stock is trading above the $2.62 target price set by analysts and is also trading 0.68% above its 50-day moving average.
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