RadioShack Corp. said Friday its first-quarter profit plummeted 85 percent on dissappointing sales of cellular phones and a write-down of the electronics retailer’s assets and inventory. Its share price fell on the news.
The company reported earning $8.4 million, or 6 cents per share, for the quarter ended March 31 compared to $55 million, or 34 cents per share, a year earlier.
Revenue rose to $1.16 billion from $1.12 billion a year ago. Sales at stores open at least one year, a key measure for retailers, fell 1 percent.
“While we knew first quarter would be weak, the results are worse than we anticipated,” said acting Chief Executive Claire Babrowski. “We clearly have a lot more work to do to get this company back to levels of profitability which we all expect.”
However, Babrowski said the results would not change the company’s belief in a turnaround plan announced earlier this year, which includes closing several hundred stores.
At the end of last year, the company stopped selling Verizon Wireless phones and service and switched to Cingular, and company officials acknowledged they struggled to let consumers know about their Cingular offerings.
The company also said write-downs related to the turnaround plan reduced pre-tax income by about $10 million.