Earnings Preview: RadioShack Corporation

RadioShack Corporation (RSH) is expected to report Q2 earnings before market open Thursday, July 24.

Guidance

Analysts are looking for a profit of 26c on revenue of $908.55M. The consensus range is 19c to 30c for EPS, and revenue of $895M to $917.45M, according to First Call.

Analyst Views

Due in part to sales of TV converter boxes, a Lehman Brothers analyst expects the consumer electronics retailer's results will exceed expectations. In a note to clients, the analyst said that the market may have underestimated the potential contribution from the converter boxes since the product "just began to gain traction in the last couple of months." However, over the long-term, the analyst said RadioShack's shares may not break out of a trading range until the company demonstrates that it can consistently generate top-line growth and overcome the challenges it faces from being overexposed to the wireless business.

A Deutsche Bank analyst believes RadioShack may soon test a new concept that will "replicate the look and feel" of Apple (AAPL) stores, and may include access to some wireless brands not carried by the company. The analyst said the new stores would target higher end, non-mall sites and capitalize on the growing popularity of touch-screen phone technology.

A Stifel Nicolaus analyst expects sequential revenue growth from the company due to strong sales of video games and GPS devices, but warns sluggish wireless sales and lower profit margins may eat into its profit.