RadioShack reported an $11.9 million fourth-quarter profit Tuesday, down 79 percent from the $57 million it earned in the same period a year earlier.
The results were in line with the Fort Worth-based company's forecast issued Jan. 30, when it said earnings would be off more sharply than expected due to an ongoing shift toward lower-profit wireless products, continued softness in its Sprint wireless business and greater-than-budgeted holiday promotions.RadioShack CEO Jim Gooch said the company expects its gross profit margin to remain under pressure in 2012, as the company works to build consumer awareness of its wireless offerings. Gooch said the company expects net profit to be down in 2012 compared with 2011."We're expecting first-quarter results to be even more difficult than the fourth quarter," he told analysts and reporters in a conference call.Earnings per share were 12 cents, compared with 51 cents per share a year earlier. The company said it finished the fourth quarter with a cash balance of $591.7 million, up from $569.4 million.Total sales rose 5.9 percent to $1.39 billion, driven by the rollout of the company's Target Mobile Centers to 1,496 locations as of Dec. 31, compared with 850 a year earlier.Sales at stores and Target centers open at least a year rose 2.2 percent.RadioShack said that was "primarily attributable" to higher sales of AT&T and Verizon Wireless products and service contracts. Sales of tablet computers also contributed.The company largely exited T-Mobile last summer, when it began selling Verizon. RadioShack still sells T-Mobile in some Target centers.RadioShack said its mobility business accounted for 51.4 percent of sales in 2011, compared with 44.2 percent the year before.Gross margin -- the difference between sales and the cost of those sales, as a percentage of revenue -- fell 3.5 points for the year to 41.4 percent, because of higher sales of smartphones and tablets and mobility's greater share, RadioShack said.For the first time in the fourth quarter, RadioShack sold iPhones linked to AT&T, Verizon, and Sprint; a year earlier, it carried only the AT&T iPhone. The iPhone in particular brings higher cost and lower profit for the company.Longer term, Gooch said RadioShack feels good about its business. It's now selling the top three wireless carriers, and the Target centers complement its other stores, he said.For 2011, full-year profit was $72.2 million, compared with $206.1 million for 2010. Total sales rose 2.6 percent to $4.38 billion.Scott Nishimura, 817-390-7808Twitter: JScottNishimuraHave more to add? News tip? Tell us
