RadioShack Corporation (RSH) has surprised on estimates 2 out of the last 4 quarters by an average of 19.49%. RSH is trading with a forward P/E of 12.34.

Company Description

RadioShack is an electronics retailer with about 4,470 company-operated stores, 1,300 dealer outlets and 450 wireless phone kiosks throughout the U.S. as well as 200 company-operated stores in Mexico.

iPhone Expected to Boost RadioShack

In November, RadioShack announced it would begin selling Apple’s iPhone in limited stores in the Dallas/Ft. Worth and New York metropolitan areas. It would then be rolled out to all stores in 2010.

RadioShack Met Estimates in the Third Quarter

On Oct 26, RadioShack reported third quarter results that met the Zacks Consensus of 30 cents per share. Revenue fell 3.1% to $990 million as sales at company operated stores and slid 3.5% and 17.8%, respectively. The kiosk decline was primarily due to a reduction in the number of kiosks from 700 to 450 since May of 2009.

Same-store sales for company-operated stores and kiosks also fell 2.9% compared to the year ago period.

On the positive side, additional sales by RadioShack de Mexico which was acquired in Dec 2008 as well as prepaid wireless handsets and netbook sales boosted the quarter.

Zacks Consensus Estimates Holding

RadioShack is expected to report fourth quarter results on Feb 23, 2010. Analysts have been holding estimates steady in the last 90 days for the fourth quarter and 2009.

The fourth quarter Zacks Consensus Estimate is 57 cents, up from 52 cents 90 days ago. 1 out of 17 analysts has raised estimates in the last 30 days, however.

The 2009 Zacks Consensus has been holding at $1.60 per share in the last 90 days.

For 2010, analysts see just 4.12% growth. The 2010 Zacks Consensus is up 17 cents to $1.67 per share in the last 3 months.

Value Fundamentals

RadioShack is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of 2.48. RadioShack also has an outstanding 5-year average return on equity (ROE) of 27.33%. The company also pays a dividend, with a current yield of 1.20%.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.

Zacks Investment Research

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