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RadioShack Issues Earnings Warning

April 6, 2001

FORT WORTH, Texas (AP) _ Electronics retailer RadioShack Corp. warned Friday of lower first-quarter profits because of smaller gross margins in sales of satellites, computers, and some wireless phone offerings.

Investors responded by sending shares down nearly 22 percent.

Earnings per share for the Fort Worth-based company are expected to drop to between 31 cents to 33 cents for the first quarter of 2001, down from 34 cents during the same period last year, the company said Friday.

Analysts surveyed by Thomson Financial/First Call were expecting 38 cents per share.

RadioShack’s shares were off $8.40 to $30.10 in afternoon trading on the New York Stock Exchange.

The company blamed smaller profit margins on offerings that showed strong sales. Sales of personal computers were high because of markdowns intended to move inventory.

But company officials say the outlook for the rest of the year looks much better. RadioShack expects earnings per share to grow 7 percent to 10 percent for fiscal 2001.

``For the balance of fiscal 2001, we are focusing on moderate top line sales growth of 6 to 8 percent with a very keen focus on gross margin enhancement and expense reduction,″ said Leonard Roberts, RadioShack chairman and chief executive officer, in a written statement.

On a comparable store basis, sales at company-owned stores increased 7 percent for the month.

The company also reported that total sales from its retail division, including sales to its dealer/franchise stores, increased 8 percent for March, up from $348.3 million last year to $377.1 million this year.

RadioShack will announce first quarter results on April 24.

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On the Net: http://www.radioshack.com

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