RadioShack ( RSH) shares jumped Monday after the consumer electronics retailer said it expects higher year-over-year earnings for the fourth quarter.

During last year's fourth quarter, the company earned $51 million. RadioShack, which has been struggling with declining sales and quarterly losses, attributed the higher profit to improved margins, inventory management and lower selling, general and administrative expenses.

The company's same-store sales, or sales at stores open at least a year, dropped 7.8% in the fourth quarter.

"During the quarter, we achieved a sequential monthly improvement in same-store sales compared to prior trends," said Chairman and CEO Julian Day. "More specifically, during the five-week period between Thanksgiving and New Year, our adjusted comparable stores sales only decreased by approximately 2.5%."

RadioShack noted that it still expects sales challenges in the first part of 2007.

"The company was highly promotional during the first quarter of 2006 with the introduction of Cingular wireless service and discounting of excess seasonal toy inventory," Day said. "It is not our intention to chase unprofitable business; therefore, we expect a negative impact to same-store sales in the first part of 2007."

Shares of RadioShack recently were trading up $1.83 to $18.64.