RadioShack Corp. (RSH) announced its third quarter results today. Net revenues came in at $990 million, down 3.1% year over year. However, this was better than the Zacks Consensus Estimate of $981 million. The year-over-year reduction in sales is primarily due to a 2.9% decline in comparable same-store sales for company-operated stores and kiosks in the reported quarter compared to the prior-year quarter.
Segment wise, revenues from company-operated store declined 3.5% year over year, Kiosks sales declined 17.8% year over year, whereas revenues from Other services increased 13.5% year over year. Acquisition of RadiosShack de Mexico in December 2008 has significantly contributed to the Other services segment. Product category wise, sales declines in digital-to-analog converter boxes, laptop computers, batteries, wireless accessories, and GPS products.
On the other hand, the company generated increased revenues from Sprint Nextel Corp. (S) postpaid wireless business, increased sales of prepaid wireless handsets and airtime, the addition of T-Mobile, a division of Deutsch Telekom AG (DT) as a postpaid wireless carrier, and increased sales of netbooks.
GAAP net income, in the third quarter, was $37.4 million or 30 cents per share compared to a net income of $49.1 million or 38 cents per share in the year-ago quarter. This was in line with the Zacks Consensus Estimate of 30 cents per share.
Quarterly gross profit was $471.1 million compared to $477.4 million in the prior-year quarter. However, gross margin was 47.6% in the reported quarter compared to 46.7% in the same quarter of the previous year. This is mainly due to a favorable sales-mix for the high-margin products. Quarterly Selling, General, and Administrative expenses were $380.7 million compared to $370.4 million in the year-ago quarter. Operating income for the third quarter was $69.4 million, or 7% of sales, compared with $84.9 million, or 8.3 % of sales in the same quarter of last year.
At the end of the third quarter, RadioShack had $856.7 million of cash & cash equivalent compared to $824.1 million at the end of the prior-year quarter. Total debt, at the end of the same quarter was $687.7 million compared to $685.7 million at the end of the year-ago quarter. During the third quarter, the company consumed (negative cash generation) $19.8 million of cash for operations and capital expenditure was $18.2 million.
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