* Q4 EPS 51 cents vs Wall Street view 53 cents
* Sales up 3.8 percent to $1.37 billion
* Sees 2011 EPS $1.60-$1.90, Street view is $1.80
(Revises first sentence, adds CFO comments and details on
SAN FRANCISCO, Feb 22 RadioShack Corp RSH.N
reported a steeper decline in quarterly profit than Wall Street
expected, hurt by higher markdowns over the holidays and
weakness in its T-Mobile business.
Demand for lower-margin wireless handsets also weighed on
the U.S. electronics retailer's margins.
Net income in the fourth quarter ended Dec. 31 was $57
million, or 51 cents per share, compared with $75.7 million, or
60 cents per share, a year earlier.
Analysts on average were expecting earnings of 53 cents per
share, according to Thomson Reuters I/B/E/S.
Net sales rose 3.8 percent to $1.37 billion, the company
said, above the $1.01 billion expected by Wall Street.
The retailer has sought to counter weak demand for
converter boxes, antennas and other accessories by selling
wireless devices and calling plans.
But it faces stiff competition from larger rival Best Buy
Co Inc (BBY.N), online retailers like Amazon.com (AMZN.O) and
some carriers that sell phones directly to consumers.
Radio Shack has also been investing more in wireless kiosks
inside Target Corp (TGT.N) stores, adding more pressure on
Last year, RadioShack signed a deal with T-Mobile USA Inc,
a unit of Deutsche Telecom (DTEGn.DE), in an effort to boost
its wireless business.
But in late January, the company warned about weakness in
margins and cited a disappointing performance in that new
Gross margins fell to 41 percent of sales from 43.9 percent
a year earlier.
"During the quarter, we struggled with T-Mobile's product
offerings not being competitive with other carriers," said Jim
Gooch, currently the company's president and chief financial
officer who will assume the role of chief executive in May.
Without elaborating, he said that T-Mobile had "materially
breached" its contract during the fourth quarter and said legal
discussions were under way.
Radio Shack announced last month that its current CEO,
Julian Day, would retire, to be succeeded by Gooch.
Looking ahead, Radio Shack said it expects 2011 earnings
to range between $1.60 to $1.90 per share, with sales to rise
in the low-to-mid single-digit percent range.
Analysts on average have been expecting 2011 earnings per
share of $1.80.
Shares closed down 2.5 percent at $15.31 on the New York
Stock Exchange, but did not move after hours.
(Reporting by Alexandria Sage and Dhanya Skariachan; Editing
by Tim Dobbyn and Matthew Lewis)