Clouds Hang Over RadioShack's Day

Updated from 11:27 a.m. EDT

Shares of RadioShack(RSH) were sliding 12% Monday after the electronics seller posted a second-quarter revenue decline that was worse than analysts' estimates.

The stock drop signaled that investors, who had sent shares soaring this year, may be growing frustrated with CEO Julian Day's approach of cutting costs to improve the bottom-line without delivering sales growth.

For the quarter, the Fort Worth, Texas-based chain swung to a profit of $47 million, or 34 cents a share, from a loss of $3.2 million, or 2 cents a share, a year ago.

Revenue, however, slid to $934.8 million from $1.1 billion the year before.

Analysts polled by Thomson Financial were predicting earnings of 25 cents a share on revenue of $982.5 million.

RadioShack pointed to its post-paid wireless business as having a continued negative impact on its sales. Same-store sales, or sales at stores open at least a year, fell by 8.9% in the quarter.

"Against the background of a smaller, but more profitable, sales base our financial performance this quarter marked a continuation in trend," said Jim Gooch, the company's chief financial officer, in a statement. "We continue to look for opportunities to improve our company's performance as we head into the second half of the year."

William Baldwin, an analyst for Baldwin Anthony Securities, says that up until recently, Wall Street had been pleased with Day's efforts to cut costs. Before Monday's selloff, shares of the company had surged 72% since the beginning of 2007.