FORT WORTH (AP) – RadioShack Corp. reported a $21 million loss for its second quarter, surprising Wall Street as sales of consumer electronics and personal computer accessories dropped.
Its shares tumbled more than 10 percent in early premarket trading Wednesday.
The chain’s troubles are symbolic of wider problems in the brick-and-mortar electronics industry. RadioShack and Best Buy Co. are dealing with shoppers increasingly move away from devices like computers and cameras to buy tablets and smartphones, which are less profitable for retailers.
Stores are also contending with consumers “window shopping” in stores but buying products for less from online competitors such as Amazon.com Inc.
RadioShack’s lackluster quarterly performance comes one day after a UBS analyst downgraded the company and cut its price target, citing its lack of a clear strategy. Michael Lasser lowered the retailer to “Sell” from “Neutral” and reduced its price target to $3 from $4.40.
RadioShack said Wednesday that its loss amounted to 21 cents per share, for the three months ended June 30 compared with net income of $24.9 million, or 24 cents per share, in the prior-year period.
Analysts predicted earnings of 3 cents per share for the latest quarter, according to a FactSet survey.
Revenue rose 1 percent to $953.2 million from $941.9 million. But the results missed the $968.4 million that Wall Street expected.
Revenue at stores open at least a year were basically flat. This metric is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed.
Its shares fell 39 cents, or 10.7 percent, to $3.26 in early premarket trading.
Mobile phone sales climbed 3.3 percent at company-run RadioShack stores in the U.S., but the Fort Worth, Texas retailer was hurt by shoppers snapping up less profitable smartphones.
Sales of consumer electronics fell 26.5 percent.
RadioShack has about 4,700 company-run stores in the U.S. and Mexico, 1,500 wireless phone centers in the U.S. and approximately 1,100 dealer and other outlets worldwide.
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