NEW YORK (TheStreet) -- Yesterday's second quarter earnings release by troubled electronics retailer RadioShack (RSH) lacked the shock value that I believe many were expecting. It certainly was not a good quarter; there were no revelations big enough to suggest that a turnaround has begun.
Likewise, there was no death blow, either. It was a mixed bag; better than expectations in some areas, and worse in others, best described as "the mildly good, the bad, the ugly, and the somewhat interesting".
The mildly good news, or perhaps most surprising news, was that revenue came in at $845 million, more than $30 million ahead of consensus estimates. This led to a bit of confusion in early trading, as shares opened the day up about 7%, before closing down 5%. Although revenue was down slightly from the same quarter last year, same store sales were actually in positive territory, up 1.3%, which was the first time that had happened since the fourth quarter of 2010.
Finally, the company's "high margin signature platform" generated same store sales growth of 6.4%. The company ended the quarter with $432 million in cash, well more than enough to pay off the $214 million in convertible debt that matures this year.The bad news was that the better than expected revenue came at a price as gross margins fell from 40.1% last year to 37.2%, due in part to inventory reduction efforts. Same store sales of the company's consumer electronics platform were down 9.8%, although the company is moving away from that area. The ugly news centered on the bottom line. Analysts expected a loss of 24 cents, and the company lost 53 cents, or $53 million. Had it not been for the revenue surprise, and a few other tidbits in the release, the stock probably would have suffered a much greater loss than it did. There were also several mildly interesting bits of news, the first being that CFO Dorvin Lively has left the firm for the same role at Planet Fitness. He will be replaced in the interim by Holly Etlin, of turnaround firm AlixPartners. Secondly, after weeks of speculation, CEO Joe Magnacca announced that the company has indeed hired an investment banker, Peter J. Solomon Co, to assist in turnaround efforts.
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