Wall Street congratulates RadioShack profits

RadioShack Corp.’s stock stood out this morning as it shot up nearly 15 percent to $26.24, well above its 52-week high, on news that the electronics retailer’s profits in the fourth quarter jumped 64 percent to $84.5 million after cost-cutting measures took effect.
Revenue, however, fell 13 percent to about $1.46 billion in the quarter, down from $1.67 billion in the year-ago quarter. Thomson Financial’s survey of analysts showed expectations of revenue of $1.47 billion. Yet traders obviously were heartened by the earnings and cost-cutting news and drove up the company’s stock after the earnings announcement. Total operating expenses at the company dropped to $519.3 million from $604.5 million in the year-ago quarter.
RadioShack has had a rollercoaster ride in the past two years. Last summer, the company put its executive suite on shuffle, cut more than 400 employees from its corporate ranks and closed hundreds of stores nationwide. The chain now sells Cingular Wireless L.L.C. and Sprint Nextel Corp. handsets and service, but its decision to drop Verizon Wireless and take up with Cingular in 2005 may have contributed to its woes, according to analysts.