NEW YORK (Reuters) - U.S. electronics chain RadioShack Corp RSH.N reported higher-than-expected quarterly profit, driven by a 49 percent jump in wireless product sales, sending shares its up 2.2 percent.
RadioShack has been focusing on its wireless business to offset weak sales of products like TV converter boxes, video game systems and batteries.
The retailer, which is working to rebrand itself as “The Shack,” said on Monday that first-quarter net income rose to $50.1 million, or 39 cents a share, from $43.1 million, or 34 cents a share, a year earlier.
Analysts, on average, were expecting earnings of 36 cents a share, according to Thomson Reuters I/B/E/S.
Net sales rose 4 percent to $1.04 billion from $1 billion a year earlier. Same-store sales for company-owned stores and kiosks rose 4.7 percent.
Sales in the wireless business rose 48.8 percent, helped by higher Sprint Nextel postpaid wireless sales, the addition of T-Mobile as a third postpaid wireless carrier and higher sales of prepaid wireless handsets and airtime.
Sales fell 26 percent in its accessory business, which include digital converter boxes where sales in this segment fell to $10.6 million in the latest quarter from $72.4 million a year earlier.
BB&T Capital Markets analyst Anthony Chukumba said wireless sales should remain strong for a few more quarters, but would slow once the company cycles the addition of T-Mobile and the iPhone.
“The question once again becomes ‘where’s the growth going to come from?’,” Chukumba said. “That’s the $64,000 question.”
RadioShack said capital expenditures were $12.3 million in the first quarter, down from $26.2 million in the year-earlier period. It said it expects full-year capital expenditures to range from $100 million to $120 million.
RadioShack shares rose 51 cents to $23.42 in after hours trading from their close at $22.91 on the New York Stock Exchange.
Reporting by Martinne Geller; Additional reporting by Dhanya Skariachan; editing by Andre Grenon, Bernard Orr
Our Standards: The Thomson Reuters Trust Principles.