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RadioShack posts $41.4 million profit

FORT WORTH -- RadioShack Corp., the third-largest U.S. electronics retailer, reported second-quarter profit that fell less than analysts estimated after sales of digital-television converters drove the chain's first revenue increase in two years.

Net income declined 12 percent to $41.4 million, or 32 cents a share, the Fort Worth-based company said Thursday in a statement. Excluding a one-time cost, the earnings beat the average estimate of analysts by 9 cents a share. Sales rose 6.4 percent to $994.9 million.

Sales in stores open at least 12 months rose 6.9 percent, the biggest gain since 2001. The planned transition of U.S. television signals to digital in February spurred demand for converter boxes, and may not yet be an indication that Chief Executive Officer Julian Day has ended revenue declines for good, Soleil Securities Corp. Scott Tilghman said.

"At this point, we'd be hard pressed to say that the turnaround is working," Baltimore-based Tilghman said in an e- mail. "The company just happens to have benefited from what is likely a short-term product cycle." Tilghman is one of 10 analysts who advise investors to hold RadioShack shares.

RadioShack rose $2.20, or 16 percent, to $16.22 before the start of New York Stock Exchange trading Thursday.

Excluding a tax gain and a cost stemming from a new headquarters lease, profit was 35 cents a share. Analysts estimated earnings of 26 cents a share, the average of 15 projections in a survey by Bloomberg. The sales estimate was $907.7 million.

RadioShack more than doubled in New York trading in the year after Day took over in July 2006 as investors speculated he'd make the company more profitable by eliminating costs.

Since July last year, RadioShack has lost almost all its gains, and declined 17 percent this year through yesterday.

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