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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
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