RadioShack (NYSE:RSH) is tanking today and is down nearly 30% right now after forecasting fourth quarter earnings of $0.11-0.13. Wall Street was expecting around $0.37 a share.
RadioShack blamed Sprint (NYSE:S) for its weak forecast saying weakness in Sprint’s business offset sales growth from its partnership with Verizon Wireless. “We are disappointed that these positives were overshadowed by significant declines in our Sprint business,” said President and Chief Executive Jim Gooch.
Sprint has been dealing with huge costs after getting Apple’s iPhone 4S and trying to keep customers. Some analysts are saying that Sprint is getting stricter about consumer’s credit scores needed to apply or its wireless plans. Margins from wireless revenue are lower than RadioShack’s primary business. Anthony Chukumba, an analyst with BB&T Capital Markets likened wireless to a “double-edged sword.”
RadioShack’s decline started in after hours trading yesterday immediately after the company announced their dismal forecast. Currently, RSH shares are down more than 28% at $7.299. The stock has traded 28.5 million shares today, more than 10 times its daily average volume.
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