S&P drops RadioShack

Standard & Poor's said it lowered the corporate credit and senior unsecured ratings RadioShack Corp. to BB from BBB-.

At the same time, the agency said it lowered the short-term rating to B-1 from A-3.

The outlook is negative.

According to the agency, the downgrade reflects RadioShack's disappointing results so far in 2006 and S&P's expectations that they will continue to be under pressure because of the company's inability to reverse trends in the wireless business.

S&P noted that the ratings on RadioShack reflect the challenges of improving the sales and profits in its wireless business, exposure to short consumer electronics product cycles and management's use of share buybacks to boost shareholder returns.

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