Ahead Of The Bell: RadioShack Upgraded

NEW YORK (AP) — An analyst on Tuesday upgraded electronics retailer RadioShack Corp. on improving sales, particularly for wireless devices.

KeyBanc Capital Markets analyst Bradley Thomas wrote in a client note that RadioShack's third-quarter earnings were better than he expected. The company reported Monday profit fell 24 percent, while sales edged down 3 percent to $990 million, beating analyst expectations.

RadioShack reported stronger sales for its Sprint Nextel postpaid wireless business, netbooks and prepaid wireless handsets and airtime. The addition of T-Mobile as a postpaid wireless carrier — added Aug. 19 — also contributed to revenue.

"The wireless category, which represents one-third of sales, appears well positioned for trends to continue into the fourth quarter," Thomas wrote. "Sprint appears to be gaining traction through improved plans and phones. Furthermore, the entire quarter will include T-Mobile wireless sales."

Still, he said the wireless category generates higher commissions, which will pressure expenses.

He raised his rating to "Hold" from "Underweight."