Business Still Tough in Electronics and Gaming
Reports from two industries—electronics and gaming—indicate that both those businesses have improved, but long-term challenges are quite severe.
In electronics, Radio Shack beat on top and bottom line. The good news is that the wireless business continues to grow, with sales up 25.8 percent. They have opened kiosks in Target stores, and in August they announced an accelerated share repurchase program.
The bad news is that their core business had been declining for years.
Personal Electronics (video gaming hardware, digital music players), for example, declined 12.5 percent, Modern home (TVs, computers) declined 7.2 percent, Accessories (digital converter boxes) declined 12 percent.
Even with wireless, it has been tough. They have been trying to position themselves for years as the wireless provider of choice, but Best Buy is tough competition and has a broader array of relationships.
RSH has had a good run since September, up about 25% in anticipation of good numbers , but it's down 5 percen this morning.
In gaming, Boyd Gaming reported adjusted earnings of $0.02, below expectations of a gain of $0.05, EBIDTA was also a tad light .
The core Las Vegas business remains challenged, Atlantic City has had tough competition from Pa., and regional markets in Misssippi and Louisiana also face tough competition.
Still, it's less bad than before—The CEO said "We saw both stabilization and improvement in our business" with only small declines in revenues and EBIDTA from the third quarter of 2009
Some news: BYD said they would not exercise their right to match the offer MGM received for its non-controlling 50% interest in Borgata. Shows how tough the AC market has become.
With a tough business, Boyd has had a difficult time moving its stock off the September low.
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