Radio Shack bonds off as company swings to third-quarter loss

By Paul Deckelman

New York, Oct. 23 - Radio Shack Corp.'s bonds were lower on Tuesday morning after the Fort Worth, Texas-based consumer electronics retailer reported quarterly results, including a slide into the red versus a year-ago profit.

Radio Shack's 6¾% notes due 2019 fell to 58¼ bid, down about 4 points from levels seen on Monday, on round-lot volume of some $8 million, making it one of the more active junk bonds this morning.

Radio Shack reported that for the third quarter ended Sept. 30, it lost $47 million, or 47 cents per diluted share, versus net income of $300,000 last year. Excluding one-time items related to sales, general and administrative expenses (SG&A) and impairment charges, the net loss would have been $33 million, or 33 cents per share.

However, the company said that it continues to have a strong balance sheet and total liquidity of $938 million, including $175 million of new financing since its last earnings report.

Dorvin D. Lively, interim chief executive officer of Radio Shack, said, "Overall, our business performed below expectations. I am most disappointed in our post-paid mobility business where we saw a continued decline in margin performance."

For the overall market Tuesday morning, the KDP High Yield Daily index stood at 74.66%, down 9 basis points from Monday's close, while its yield rose by 3 bps to 5.96%.

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