RadioShack Corp. (RSH) has declared better-than-expected first quarter 2010 financial results. Comparable store sales for company-operated stores and kiosks (stores and kiosks opened at least a year) grew 4.7% year-over-year. This is a key retail performance indicator measuring growth from existing sales locations. As a result, in after-market trade on NYSE, the stock price of RadioShack was up 36 cents (2.36%) to $23.45.
 
GAAP net income, in the first quarter, was $50.1 million or 39 cents per share compared to a net income of $43.1 million or 34 cents per share in the year-ago quarter. First quarter EPS of 39 cents was far ahead of the Zacks Consensus Estimate of 36 cents. Management’s strategy of emphasizing innovative mobile and technology products has helped RadioShack improve its bottom-line.
 
Quarterly net revenue was $1,041.7 million, up 4% year-over-year and also above the Zacks Consensus Estimate of $997 million. The year-over-year increase in revenue was primarily due to continued growth in the wireless segment and a recent improvement in accessory and power-product platform sales.
 
Quarterly gross profit was $491.9 million compared to $467.6 million in the prior-year quarter. Gross margin was 47.2% in the reported quarter compared to 46.7% in the same quarter of the previous year. This was mainly due to favorable sales-mix for high-margin products.
 
Quarterly Selling, General, and Administrative expenses were $380.7 million compared to $365.8 million in the year-ago quarter. Operating income in the first quarter was $90.8 million, or 8.7% of sales, compared to $80.1 million, or 8% of sales in the same quarter of the last year.
 
During the first quarter of 2010, RadioShack used $14.6 million of cash for operations compared to a cash generation of $86.1 million in the prior-year quarter. Free cash flow (cash flow from operations less capital expenditures) in the reported quarter was a negative ($26.9) million compared to $59.9 million in the year-ago quarter.
 
At the end of the first quarter of 2010, RadioShack had $871.8 million of cash & cash equivalent compared to $873.2 million at the end of the prior-year quarter. Total debt, at the end of the same quarter was $661.7 million compared to $700.2 million at the end of the year-ago quarter.
 
Segment wise Results
 
Quarterly revenue from U.S. RadioShack Company-operated store segment was up 4.3% year-over-year to $899.7 million.
 
Within this segment, Wireless sales were up 48.8% primarily due to higher Sprint Nextel Corp. (S) and T-Mobile, a division of Deutsch Telekom AG (DT) postpaid wireless sales, higher prepaid wireless handset sales, offset by lower GPS sales. Service revenue was up 24.8% due to higher prepaid wireless airtime.

Accessory sales were down 26% due to significant sales decline of digital-to-analog TV converter boxes, imaging accessories, and video game accessories. However, wireless accessories sales have increased. Modern Home sales declined 14.3%, Personal Electronics sales declined 9.6%, Power sales declined 8.5%, and Technical sales declined 4.3%.
 
Kiosks segment revenue declined 8.2% year-over-year to $57.2 million. This was primarily due to fewer kiosk locations and the closure of Sprint-branded kiosks in August 2009.
 
Revenue from Other services segment increased 9.7% year-over-year to $84.8 million. RadioShack de Mexico significantly contributed to this segment.

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