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GameStop Posts Fair Earnings but is Optimistic on Upcoming Console Releases

  +Follow August 22, 2013 2:09PM
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Retailers in general are moving away from physical media towards the digital model, as companies like Best Buy Co. Inc (BBY) devote less and less floor space to CDs and DVDs and Redbox operator Outerwall Inc. ($OUTR) desperately scramble to branch out into other services. It looked like used video game retailer GameStop Corp (GME) was no different, and would likewise have to adapt or wither away.

A superficial look at their second quarter profits from 2013 suggests they are indeed going the way of the Blockbuster Video. In their second quarter 2013 earnings report, the game retailer revealed profits fell 50 percent for the company. Additionally, same store sales dropped 11 percent, suggesting the sea change to digital is indeed killing the company.

However, GameStop beat earnings expectations, and revealed positive news on two fronts. Digital receipts for the company grew 17 percent. Also, the retailer voiced optimism concerning one area of physical media that can’t be replaced by digital. It’s an area where they expect to shine through the rest of the year: video game consoles.

According to the retailer, over half of gamers expect to buy a new console this year, and GameStop’s CEO Paul Raines expects “a lot of energy” in that industry that should prop up the company for the foreseeable future.

So while physical content might have rocky future, the release of consoles like Sony Corporation’s (SNE) Playstation 4 and Microsoft Corp.’s (MSFT) Xbox One should more than compensate. Indications from Microsoft and Sony seem to confirm this.

On Aug. 20 Sony said preorders for Playstation 4 had already topped a million, exceeding their own expectations. The company announced on Aug. 21 that the console will hit stores on Nov. 15.

Microsoft will release the anticipated Xbox One sometime in November. The tech giant previously reversed controversial gaming restrictions, which would have severely hampered the ability of GameStop to sell used games, which significantly invigorated the retailer’s outlook.

GameStop outlook continues to brighten. The retailer calls for earnings to increase significantly in the coming quarter, and expects same-store sales to rise between 11 and 15 percent.

For their second quarter 2013 earnings report, GameStop reported a net profit of $10.5 million, or $0.09 per share, versus the net profit of $21 million, or $0.16 per share, from the same period a year ago. Revenue for the quarter was $1.38 billion, as compared to $1.55 billion from the previous year. Analysts were expecting a profit of $0.05 per share on revenues of $1.36 billion.

GameStop is up 10.88 percent to hit $52.80 a share.

(image of GameStop courtesy of Wikimedia Commons)

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for GME
TradeLongShort
19 Sep 14 20:29:22
16 stocks in the $SPX were initiated with PPS sell signals on the daily charts including $YHOO $ORCL $AZO $AIG $GME and $BK
CMCMFIN
19 Sep 14 18:46:59
RT @lcdnews: GameStop #highyield bonds advance in firm secondary market $ http://t.co/VTTV4n7oxq $GME #hy #hybonds #gaming
Patrick Seitz
19 Sep 14 17:52:59
Holiday video game sales outlook not looking so hot. http://t.co/Z6luzK6dNe $GME $EA $TTWO $TWX $ATVI $MSFT $SNE
Kevbeau68
19 Sep 14 15:26:11
RT @Briefingcom: $GME: Gamestop announces the pricing of its $350 mln offering of 5.50% senior notes due 2019 http://t.co/a3tdlQgD2b
Briefing.com
19 Sep 14 15:24:49
$GME: Gamestop announces the pricing of its $350 mln offering of 5.50% senior notes due 2019 http://t.co/a3tdlQgD2b
Skeletor Capital
19 Sep 14 14:45:15
RT @lcdnews: GameStop #highyield bonds advance in firm secondary market $ http://t.co/VTTV4n7oxq $GME #hy #hybonds #gaming
Zubeyr Kamil Açıksar
19 Sep 14 14:25:03
RT @lcdnews: GameStop #highyield bonds advance in firm secondary market $ http://t.co/VTTV4n7oxq $GME #hy #hybonds #gaming
LCD News
19 Sep 14 14:24:47
GameStop #highyield bonds advance in firm secondary market $ http://t.co/VTTV4n7oxq $GME #hy #hybonds #gaming
Charlie Beresford
19 Sep 14 14:18:45
RT @lcdnews: GameStop #highyield bonds (BB+/Ba1) price to yield 5.5% $ http://t.co/DG4IUuesX1 $GME #hy #hybonds
PennyStock Zone
19 Sep 14 14:03:06
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Stock Moo
19 Sep 14 13:42:04
$gme: GameStop Announces the Pricing of its $350 Million Offering of 5.50% Senior Notes Due 2019 http://t.co/FM7mPlqRJ2
LCD News
19 Sep 14 13:28:22
GameStop #highyield bonds (BB+/Ba1) price to yield 5.5% $ http://t.co/DG4IUuesX1 $GME #hy #hybonds
4-traders.com
19 Sep 14 13:25:03
GameStop : Announces the Pricing of its $350 Million Offering of 5.50% Senior Notes Due 2019 http://t.co/Eku3Gwpz9I $GME
$Stocknewsalerts
19 Sep 14 13:23:10
$GME GameStop Announces the Pricing of its $350 Million Offering of 5.50% Senior Notes Due 2019 From our Stock News Alerts App
NASDAQ
19 Sep 14 13:22:03
$GME - GameStop Announces the Pricing of its $350 Million Offering of 5.50% Senior Notes Due 2019 http://t.co/fsu6GtOVgq
BV Services
19 Sep 14 13:20:06
$GME GameStop Announces the Pricing of its $350 Million Offering of 5.50% Senior Notes Due 2019.. http://t.co/nC3u4oAeAN
PostingMyTrades
19 Sep 14 12:52:12
Expire 5 $GME Sep19 P +$496 If only I was able to get some of the stock on this one too. Will look for another entry.
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19 Sep 14 10:12:10
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John L. Person
19 Sep 14 10:07:35
PA stock alerts exiting $GME & $CA check ur email for details
CMCMFIN
19 Sep 14 08:54:14
RT @lcdnews: GameStop talks $250M BB+ bond offering (loan repay) at ~5.5% http://t.co/zsr5o13WYt $GME
LCD News
19 Sep 14 08:46:35
GameStop talks $250M BB+ bond offering (loan repay) at ~5.5% http://t.co/zsr5o13WYt $GME
HighYieldBond.com
19 Sep 14 08:46:35
GameStop talks $250M BB+ bond offering (loan repay) at ~5.5% http://t.co/8L0gzEnu35 $GME
LPLongo
19 Sep 14 08:26:53
Long a few $GME Oct calls this morning.
Jacob Wolinsky
19 Sep 14 07:58:03
If BABA closes at my PT he can afford it w/ today's gains: Ma Tells BBG Won’t Rule Out YHOO Acquisition http://t.co/PwAwFUjIe5 SHORT $GME
Daily Contracts
19 Sep 14 07:05:00
Real-Time feed of company contracts, original agreements and executive updates from GameStop $GME http://t.co/YwaRY20lr4
ZOZO
19 Sep 14 05:19:54
$GME daily 45.00 break http://t.co/D0jTdwZMRn
Clair Voight
19 Sep 14 05:01:06
$GME GameStop Corp. Earns Rating from Telsey Advisory Group (GME) http://t.co/dwkOIizht0
NoSQL
19 Sep 14 00:30:54
RT @StockFluence: GameStop Corp.: 30 (+0.67%) http://t.co/FoJH4knfQR $GME #GameStop #Sentiment #Stock #Analysis #BigData
StockFluence.com
19 Sep 14 00:01:39
GameStop Corp.: 30 (+0.67%) http://t.co/FoJH4knfQR $GME #GameStop #Sentiment #Stock #Analysis #BigData
4-traders.com
18 Sep 14 21:50:45
GameStop : Declares Private Offering of Senior Notes http://t.co/bFVAEUHKIo $GME
pretty_darn_tasty
18 Sep 14 21:02:45
@OMillionaires Problem: had $GME at .50, sold at 1.20 tho went to 2.50 also had $SSYS @. 85 went to 1.75 then dumped sold at -.10. I suck.
PennyStock Zone
18 Sep 14 20:46:45
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18 Sep 14 15:46:59
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Khaled Mourad
18 Sep 14 13:26:48
$MCZ $HEAR $ZAGG $LOGI $GME Mad Catz Short Interest http://t.co/3aez8Cr6Bg Site visitors http://t.co/5yMfapw3FC something building up?
Shiraz
18 Sep 14 11:42:05
$GME upgraded?! yesssss
Harry Walkman
18 Sep 14 09:30:49
$GME GameStop's Used And New Game Sales Are Under Assault (GME) http://t.co/Hfl7xFxwX8
PennyStock Zone
18 Sep 14 08:12:58
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17 Sep 14 19:17:46
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Seeking Alpha
17 Sep 14 12:35:44
GameStop's Used And New Game Sales Are Under Assault http://t.co/BIpxj3fFAg $GME
PennyStock Zone
17 Sep 14 12:26:22
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Daily Contracts
17 Sep 14 11:06:09
$GME News: Second Amended And Restated Credit... http://t.co/EnVXPSa7Ox
Derek Capo
17 Sep 14 07:53:03
$GME GameStop strategic decisions in the past 10 days is a boon for shareholders, check out the article I wrote here! http://t.co/fC6ANx3D8G
Traffic Generator
17 Sep 14 07:37:51
RT @SeekingAlpha: GameStop's Recent Moves Will Boost Sales, Margins And Wall Street Price Targets http://t.co/f2UJaSNlyk $T $GME
Seeking Alpha
17 Sep 14 07:32:57
GameStop's Recent Moves Will Boost Sales, Margins And Wall Street Price Targets http://t.co/f2UJaSNlyk $T $GME
J R
17 Sep 14 07:32:56
Would love to see $GME trade out of this range
WKRB News
17 Sep 14 07:14:42
GameStop Corp. Earns Rating from Telsey Advisory Group $GME http://t.co/pvVPG62TUw
PennyStock Zone
17 Sep 14 05:16:37
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12Stocks.com
17 Sep 14 03:02:37
Weekly S&P500 #Stocks Performance $TAP $BBY $X $CME $GMCR $ETFC $ICE $LUV $SPLS $YHOO $GRMN $GME $EOG $STT more@ http://t.co/RPeaHBZz9y
Tim Ikels
16 Sep 14 23:10:28
$GME | GameStop Corp. daily chart: http://t.co/HBb6EGgC2g
Eunice Thompson
16 Sep 14 20:10:40
$PBR, $MU, $YHOO, $SLV my potential long. $PEP, $IBM, $GME and $EEM may have an upward continuation tomorrow. will see!
				
				
  +Follow August 22, 2013 2:09PM
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