FORT WORTH, Texas, Jan. 30, 2012 /PRNewswire/ -- RadioShack Corp. (NYSE: RSH), a leading national retailer of innovative mobile and technology products, services and accessories, today announced preliminary, unaudited results for the fourth quarter ended Dec. 31, 2011.
Total net sales and operating revenues from continuing operations for the 2011 fourth quarter increased approximately 6% to $1.39 billion compared to $1.31 billion for the fourth quarter last year. Comparable store sales for company-operated stores increased approximately 2% during the 2011 fourth quarter. Consolidated gross profit as a percent of net sales in the 2011 fourth quarter is expected to be approximately 35%, compared to 41% in the 2010 fourth quarter. Diluted earnings per share for the 2011 fourth quarter are expected to be in the range of $0.11 to $0.13, compared to $0.51 per diluted share reported in the 2010 fourth quarter.
The decrease in gross margin in the 2011 fourth quarter, compared to the 2010 fourth quarter, reflects a shift in mix within mobility sales towards certain lower margin smartphones and mobile devices; a higher percentage of mobility sales in the overall revenue mix, largely driven by the Company's expansion of Target mobile centers; and the impact of a more promotional holiday season.
The Company's results for the fourth quarter are due in large part to the underperformance of the Sprint postpaid wireless business and reflect further unanticipated changes in Sprint's customer and credit models. These changes resulted in fewer new and upgrade activations and a decline in Sprint postpaid revenues in the fourth quarter compared to the 2010 fourth quarter and compared to third quarter 2011. In addition, fourth-quarter results reflect a highly promotional holiday season and ongoing pressures on consumer spending.
"Our transition continues as we work to maximize our mobility business opportunities, particularly now that our assortment includes the top three national wireless carriers," said Jim Gooch, president and chief executive officer. "In that regard, we continue to make progress in the mobility sector with growth in sales of new iconic handsets, incremental sales growth from new partner Verizon Wireless, higher revenues from AT&T, and higher sales of tablets and e-readers. However, we are disappointed that these positives were overshadowed by significant declines in our Sprint business.
"We recognize that certain smartphones and other mobile devices, mainly tablets and e-readers, are a growing mainstay of consumer electronics purchases, and are significantly changing the margin profile of our mobility business. With this in mind, we are resetting our business expectations for 2012. We remain confident in the health of our business absent the Sprint impacts and in the progress we have made on initiatives put into place in 2011. Our plan in 2012 is to build on this progress. Our key initiatives include strengthening our relationships with our wireless carrier partners as we continue to grow our mobility business, make further enhancements to our store and online experience, and optimize our overall selling and merchandising strategy."
Gooch concluded, "We have also decided to suspend share repurchases for the near term, and to instead continue to reinvest in our business and return value to shareholders through our quarterly dividend.