RadioShack Cuts Costs, Shares Fall

Although RadioShack has managed to post results that beat analyst expectations in the second quarter, its shares have fallen 8 percent. Investors are worried that RadioShack’s second quarter results only came after vigorous cost-cutting measures and that the electronics company will not be able to maintain profitability once it runs out of costs to cut.
 
Analysts have also wondered whether or not RadioShack actually went too far in its cost-cutting measures, hurting the company’s chances of gaining ground as other competitors continue to bow out. RadioShack ended up cutting 11 percent of its costs mainly through limiting the amount of money that the company spent on advertising.
 
For RadioShack to get back on its feet, analysts have recommended that the company rearrange its expenses in such a way to let it spend more money on advertising. RadioShack has already closed many unprofitable stores and shed many jobs in order to remain profitable, but the fact remains that RadioShack will eventually run out of costs to cut and be forced to make some changes.

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