Earnings Preview: RadioShack Corporation

RadioShack Corporation (RSH) is expected to report Q3 earnings before market open Thursday, October 23, with a conference call scheduled for 9:00 am ET.

Guidance

Analysts are looking for a profit of 36c on revenue of $987.93M. The consensus range is 28c to 45c for EPS, and revenue of $956.5M to $1.05B, according to First Call.

Analyst Views

As the retailer continues to face a difficult economic climate, RBC Capital analyst Soct Ciccarelli cut FY08 EPS estimates to $1.70 from $1.80 and lowered his FY09 forecast to $1.55 per share from $1.80. While Ciccarelli kept his Sector Perform rating given the current retail environment and additional questions about the consumer electronics retailer's growth potential over the longer-term, outside of Best Buy (BBY), he says RadioShack "looks to be the cheapest stock in our universe". Downside, he says, is limited on shares given their current valuation.

KeyBanc analyst Bradley Thomas believes sales of digital converters remained a "strong tail wind" in the quarter and says each of RadioShack's stores sells nearly four converters per day to prepare consumers to switch to digital television in February, 2009.

At the company's annual vendor conference, RadioShack introduced its new organizational structure under Executive Vice President of Store Operations, Bryan Bevin. The retail operations in the United States are now comprised of five areas, each of which is overseen by its own area vice president reporting to Bevin.