RadioShack earnings sink; some stores will close

DALLAS – Electronics retailer RadioShack Corp. on Friday said fourth-quarter earnings dropped 62 percent and announced plans to close 400 to 700 stores and two distribution centers as part of a plan to improve its financial performance.

“We must close underperforming, low-volume stores that are draining resources of the company,” said president and chief executive Dave Edmondson, who along with the company’s board spent most of the week defending errors in his resume disclosed in a Fort Worth Star-Telegram report.

The company said it could not project the number of job cuts until it identifies all the affected stores. A company spokesman said RadioShack hasn’t decided which stores will be closed. Examining traffic and sales patterns will lead to some stores moving or closing, the spokesman said.

RadioShack said the stores it plans to close are company-operated. It wants to close 400 by Sept. 1, but have the entire reduction complete within 18 months.

There are nearly 7,000 RadioShack stores operated by the company or dealers, and more than 700 wireless kiosks.

The company’s shares sank $1.57, or 8 percent, to close at $19.08 on the New York Stock Exchange.

• Also Friday, Sirius Satellite Radio Inc. reported a wider loss in the fourth quarter as costs for building its rapidly growing base of subscribers mounted.

The company, which added shock jock Howard Stern to its roster last month, lost $311.4 million compared with a loss of $261.9 million in the same period a year ago.

The loss per share came in at 23 cents, a penny lower than analysts surveyed by Thomson Financial had been expecting and 2 cents greater than the loss of 21 cents a year ago. Revenues more than tripled to $80 million from $25.2 million.

Despite the relatively in-line results, the shares of both Sirius and its rival XM Satellite Radio Holdings Inc. fell on Friday, a day after XM disclosed the sudden departure of one of its board members, who warned of a looming “crisis” at that company if it didn’t rein in costs.

XM also posted a much wider than expected loss on Thursday as it spent heavily on marketing to counter the threat from Stern’s arrival at Sirius.

Sirius’ shares fell 39 cents, or 6.9 percent, to close at $5.26 Friday afternoon after heavy trading, while XM’s shares dropped $2.41, or 10 percent, to close at $21.57, also in heavy trading.

Sirius and XM are spending heavily to expand their businesses, which charge about $13 a month for dozens of channels of commercial-free music, as well as talk, news and sports.

Sirius reported that its costs for acquiring new subscribers more than doubled to $145.2 million from $64.9 million in the same period a year ago. Its average cost for adding each subscriber, however, fell to $113 from $124 in the same period a year ago.

Sirius ended 2005 with 3.3 million subscribers, triple the level from a year ago of 1.1 million. XM has more than 6 million subscribers.

Sirius, which is based in New York, said it added a total of 1.27 million subscribers in the fourth quarter, the leadup period before it added Stern to its lineup in early January.