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US stock market daily report (March 04, 2014, Tuesday)

March 5, 2014, Wednesday, 05:34 GMT | 00:34 EST | 11:04 IST | 13:34 SGT
Contributed by Millennium Traders


RadioShack Corp. (RSH-NYSE) shares were trading lower by 15% at $2.30 a share during early afternoon on Tuesday. Concerns continue to mount over stability of the company after abysmal Q4 results were bad enough to raise concerns of the chance of survival for the electronics retailer. Same store sales fell 19%.

For Q3, RadioShack reported $935 million in revenue, a 20% decrease over the $1.17 billion reported for same quarter in 2013. The report missed the Streets expectations of $1.12 billion. The electronics retailer reported their net loss widened from the $63.3 million reported in 2013 to $191.4 million for Q4 of 2013, resulting in a loss of $1.90 per share. Full year 2013 revenue came in at $3.43 billion, lower than $3.83 billion reported for full-year 2012. Comparable store sales for RadioShack were down 8.8% and their net loss widened to $400.2 million or $3.97 per diluted share, up from the net loss of $139.4 million reported in 2013.

Chief Executive Joseph Magnacca and new CFO John Feray said on a call that RadioShack plans to shutter nearly 1,100 stores. The move however does not mean the company is considering “prepackaged bankruptcy” to get out of store leases quickly because it has “sufficient” liquidity to meet its obligations” for 2014. The identity of stores to be closed or the number of jobs affected, have yet to be released. The company will have nearly 4,000 locations remaining in the USA. Magnacca said the most recent quarter’s results did not reflect the turnaround progress the company has made and added, “We were trying to do too much too quickly. I’m confident we can execute the turnaround."

Concept test stores opened by RadioShack during 2013 have been well received by retail shoppers. Under their new store format, there are plans to remodel or relocate nearly 130 stores as well as adding a few new locations during 2014 which will include availability of other popular electronic gadgets such as the iPhone, for example.

While the company reportedly used some cash from the $835 million new financing it obtained in December, it hasn’t drawn on the revolving credit line. Magnacca said in a statement, "Even in this environment, we're continuing to make progress on the five pillars of our turnaround plan: repositioning the brand, revamping the product assortment, reinvigorating the stores, operational efficiency and financial flexibility."

RadioShack declined to provide guidance for either full-year or Q1 2014, with Magnacca saying only that the company has a ”detailed strategic path to profitability” and that the whole RadioShack team is focused on execution and improving the company’s performance.

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