RadioShack Corp reported a higher-than-expected quarterly profit on lower costs and improved sales of netbooks, prepaid wireless handsets and digital televisions, and the retailer's shares rose 4 percent.

The electronics retailer, which signed a deal with T-Mobile USA Inc last week to expand the scope of its wireless offerings, also saw strong demand for its television antennas and Voice over Internet Protocol Products.

Net income at the Fort Worth, Texas-based retail chain rose to $48.8 million, or 39 cents a share in the second quarter, from $41.4 million, or 32 cents a share, a year earlier.

Analysts had expected earnings of 29 cents a share, according to Reuters Estimates.

The retailer -- which has about 4,450 company-operated stores, almost 1,400 dealer outlets and nearly 600 wireless phone kiosks throughout the United States -- has closed unprofitable stores and cut staff in recent years to turn around its business.

In the quarter, the company's selling, general and administrative expenses fell on decreased advertising and lower compensation expense.

RadioShack, which also operates around 200 stores in Mexico, said second-quarter revenue fell 2.9 percent to $965.7 million.

Same-store sales, or those at stores open at least a year, fell 4 percent in the period. The retailer blamed the decline on weaker sales of wireless accessories, digital-to-analog converter boxes, GPS products, music players and digital cameras.

RadioShack faces a weak retail environment as U.S. consumers spend less on nonessentials in a deepening recession. It also tackles tough competition from Best Buy Co Inc and discounters like Wal-Mart Stores Inc striving to boost sales of consumer electronics.

RadioShack's shares were up 64 cents at $16.70 in trading before the opening bell.

(Reporting by Dhanya Skariachan; Editing by Derek Caney and Gerald E. McCormick)

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