RadioShack (RSH) doubled Wall Street's first-quarter earnings target despite a 15% sales drop, as the company's postpaid wireless business continues to struggle.
The Plano, Texas, electronics retailer made $43 million, or 31 cents a share, for the quarter ended March 31, up from the year-ago $8 million, or 6 cents a share. Excluding certain items, latest-quarter earnings were 29 cents a share. Sales fell to $992 million from $1.16 billion a year earlier.
Analysts surveyed by Thomson Financial were looking for a 14-cent profit on sales of $1.04 billion.
First quarter net income was boosted by improved gross margin -- it rose to 52% from 48.3% a year ago -- as well as a reduction in selling, general and administrative expenses and an increase in interest income when compared with the prior year period, RadioShack said.
Same-store sales dropped 9.2%, fed by declines in the postpaid wireless business and RadioShack's operation of 506 fewer company-operated stores and kiosks when compared with last year.
"We took the opportunity earlier this year to warn that same store sales numbers for the first quarter were likely to be challenging, given the highly promotional nature of our business in the first quarter last year. And so it proved," said CEO Julian Day. "Nonetheless, against this background we were able to produce financial results which reflected steady improvement in our operating economics."