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NEW YORK (
) -- Shares of
fell sharply in late trades on Monday after the electronics retailer gave a below-consensus profit outlook for its fiscal fourth quarter because of margin weakness stemming from its business with
Fort Worth, Texas-based RadioShack now sees earnings of 11 to 13 cents a share for the December-ended period on sales of $1.39 billion, well below the current average estimate of analysts polled by
for a profit of 37 cents a share on sales of $1.35 billion.
The company said it sees consolidated gross profit as a percentage of sales coming in at 35% for the quarter, down from 41% in the same period a year earlier.
RadioShack attributed its performance in the quarter to "underperformance of the Sprint postpaid wireless business" and said the results "reflect further unanticipated changes in Sprint's customer and credit models."
The company also cited a "more promotional holiday season" and a shift in product mix toward "certain lower margin smartphones and mobile devices."
The stock was last quoted at $8.20, down 20%, on volume of around 1.5 million, according to
. Based on Monday's regular-session close at $10.23, the shares were down more than 33% in the past year, scraping a 52-week low of $9.15 on Dec. 21. Wall Street was in wait-and-see mode on RadioShack with 15 of the 21 analysts covering the company at hold (13) or underperform (2).
Sprint shares fell a penny to $2.14 in the extended session on volume of 1.4 million.
"Our transition continues as we work to maximize our mobility business opportunities, particularly now that our assortment includes the top three national wireless carriers," said Jim Gooch, RadioShack's president and CEO, in a statement. "In that regard, we continue to make progress in the mobility sector with growth in sales of new iconic handsets, incremental sales growth from new partner Verizon Wireless, higher revenues from AT&T, and higher sales of tablets and e-readers. However, we are disappointed that these positives were overshadowed by significant declines in our Sprint business."
RadioShack also said it now expects net income for 2012 could come in below 2011's total, assuming business with Sprint remains at its current run rate, and that it's suspending share buybacks in the near-term in order to reinvest in the business and maintain the dividend.
Check out TheStreet's quote page for RadioShack for year-to-date share performance, analyst ratings, earnings estimates and much more.
Other stocks moving in the extended session included
, whose shares were down nearly 2% to $128.12 on volume of more than 250,000 after the Internet search company
until late February;
, whose stock was up 4% to $81.50 on volume of around 30,000 after the company reported an above-consensus profit for its fiscal third quarter and said it's agreed to acquire the banner and franchise operations of Katz Group for C$920 million; and
, whose shares fell 6% to $23.78 on volume of less than 200,000 after the company forecast non-GAAP earnings of 19 to 21 cents a share for its fiscal first quarter, slightly below the average analysts' view for a profit of 22 cents a share.
Written by Michael Baron in New York.
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