RadioShack revenue down on lower postpaid wireless sales

Once-beleaguered RadioShack Corp. – which sells wireless devices and services for AT&T Mobility and Sprint Nextel Corp., as well as a handful of prepaid providers – saw its stock soar more than 22% after reporting a rise in net income for the fourth quarter and full year in 2007.
Fourth-quarter revenue reached $94 million, down nearly 7% over the year-ago quarter. The retailer cited lower sales of postpaid wireless devices and plans and satellite radio, which were not made up by strength in the sale of prepaid wireless devices and services, GPS units, video gaming and media storage.
Fourth-quarter net income reached $101 million, up about 15% from the year-ago quarter. The consumer electronics retailer credited improved gross margins for the rise in net income, a reduction in SG&A and lower interest expenses.
Full-year revenue for 2007 reached $4.3 billion, down more than 8% over the prior year. Full-year net income reached $237 million, up from $73.4 million in the prior year.
While Julian Day, chairman and CEO, cited the improvement in profits, the executive also noted that “this result was achieved against a background of difficult and uncertain economic conditions.” That statement appeared to acknowledge the drop in revenue. While earnings exceeded a poll of Wall Street analysts by FactSet Research, analysts also said that the surge in earnings was likely short-lived, as more successful consumer electronics retailers such as Best Buy and Circuit City grow ever-larger.