RadioShack Up; iPhone Seen Helping '10 EPS, Wireless Efforts
By Mary Ellen Lloyd, Of DOW JONES NEWSWIRES
RadioShack Corp. (RSH) shares jumped 13.8% to a 52-week high in early trading
Monday amid expectations the addition of Apple Inc.'s (AAPL) iPhone to the
company's stores will boost earnings and longer-term prospects to expand its
wireless business.
RadioShack shares recently traded up $2.44 at $20.18, passing the previous 52-
week high of $18.33 set Oct. 26.
RadioShack on Friday said it would begin carrying the iPhone at a limited
number of stores later this month and will carry the smartphone nationwide
beginning in 2010.
Labeling the iPhone news a "game changer," Credit Suisse upgraded RadioShack
to outperform from neutral and raised its 2010 earnings forecast to $1.97 from $
1.36. "We believe that the wireless additions of T-Mobile and the iPhone will
create additional traffic that should also drive sales of higher-margin products
in the stores," analyst Gary Balter said.
RadioShack earlier this year added T-Mobile phones and service plans from the
Deutsche Telekom AG (DT, DTE.XE) unit to its stores. And earlier this month, it
began running Target Corp.'s (TGT) mobile-phone departments in some stores under
a new partnership expected to be spread throughout the chain.
Barclays Capital analyst Michael Lasser estimated the iPhone addition to
stores could add 3% to 5% to the company's overall same-store sales and at least
9 cents a share in 2010 earnings. The handset addition should bring in customers
who might not have otherwise considered going to a RadioShack store, and its
building momentum in the smartphone category should give it earlier access to
new products going forward, Lasser added.
-By Mary Ellen Lloyd, Dow Jones Newswires, 704-948-9145; maryellen.lloyd@
dowjones.com
(END) Dow Jones Newswires
11-09-091010ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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