RadioShack Cuts Profit Prediction
FORT WORTH, Texas (AP) _ Consumer-electronics retailer RadioShack cut its profit prediction for the fourth quarter, citing weaker sales of items ranging from cellular phones to remote-controlled toy cars.
The retailer said it expected to earn 58 cents to 60 cents per share instead of the previous forecast of 63 cents to 68 cents per share. Analysts surveyed by Thomson First Call had expected earnings of 65 cents per share for the quarter.
The company said it still expects earnings per share to grow between 13 percent and 15 percent per year for the next three years.
In trading on the New York Stock Exchange, RadioShack shares rose 41 cents, 2.1 percent, to close Friday at $19.74.
RadioShack expects to report fourth-quarter sales on Jan. 14.
In a statement, chairman and chief executive Leonard Roberts said year-over-year sales improved every month in the fourth quarter.
But, Roberts said, ``sales were consistently a little lower than our plan throughout the three-month period. In addition, gross margin trends, beginning in November, aggravated the earnings picture.″
The Fort Worth-based retailer said it saw weaker sales and gross profits margins of Sprint PCS products and service beginning in November.
It also said that sales also fell for some DVD player accessories, radio-controlled toys _ other than its popular ZipZaps micro cars _ and specialty toy batteries.
RadioShack said, however, it was sticking with long-term earnings growth assumptions based on several factors.
The company said it still foresees annual sales growth of 2 percent to 3 percent to 2005. It said overhead costs would rise 1 percent to 2 percent and gross profit margins would grow up to eight-tenths of 1 percentage point per year.
RadioShack, which has more than 7,200 stores nationwide, said it would continue to buy back its own shares, which have fallen more than 40 percent since May.
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