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RadioShack Corp. (RSH - Analyst Report) – a popular consumer electronics specialty retailer – is set to release its first-quarter 2013 results before the opening bell on Apr 23, 2013.

In the last quarter, the company delivered a 300% earnings surprise. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

RadioShack’s consumer electronics retail business is on a secular downtrend. Consumers now prefer purchasing online to visiting retail stores. Loss of foot traffic has severely impacted RadioShack’s business. Moreover, an adverse product-mix toward low-margin devices and a volatile economic scenario in the U.S. are taking a toll on the company’s revenues.

Despite these headwinds, continuous rollout of stores coupled with signing of major franchise deals in the South-East Asian countries, will improve profit for RadioShack going forward. Moreover, termination of the Target contract may further improve gross margin of the company, going forward.

Earnings Whispers

Our proven model does not conclusively show that RadioShack is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: This is because the Most Accurate estimate stands at a loss of 14 cents, while the Zacks Consensus Estimate is 11 cents. This leads to an ESP of -27.27% for RadioShack.

Zacks Rank #3 (Hold): RadioShack’s Zacks Rank #3, decreases the predictive power of ESP.

We caution investors against the stock going into the earnings announcement, as a Zacks earnings ESP of -27.27% combined with a Zacks Rank # 3 lowers the possibility of an earnings surprise.

Other Stocks to Consider

Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

Conns Inc. (CONN - Snapshot Report) has Earnings ESP of +3.85% and carries a Zacks Rank #1 (Strong Buy).

AT&T (T - Analyst Report) has Earnings ESP of +1.56% and carries a Zacks Rank #2 (Buy).

Research in Motion Limited (BBRY - Analyst Report) has Earnings ESP of +500% and carries a Zacks Rank #2 (Buy).

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