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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
US Banking News
2 Mar 15 20:23:51
GameStop Corp. Given Buy Rating at B. Riley $GME http://t.co/EmfjqqhQhG
12Stocks.com
2 Mar 15 16:02:20
S&P500 #Stocks Performance $GME $CBS $AVP $RCL $HAR $HOT $WYN $SCHW $LLTC $CCL $TIF $PLL $WU $NOV $ZTS more@ http://t.co/RPeaHBHYi0
Jack Batterson
2 Mar 15 16:01:35
Bill Gross thinking about these stocks? $GNW $ESV $GM $MU $DAL $PRU $GT $GME $MET $FCX $GM $KORS $F $WHR $MS $TWTR http://t.co/h5BmFOhtVy
12Stocks.com
2 Mar 15 14:53:07
S&P500 #Stocks Performance $AVP $HAR $GME $STJ $ENDP $NVDA $RCL $STX $MU $BWA $LLTC $WYN $HOT $URI $TIF more@ http://t.co/RPeaHBZz9y
ProTradersNews
2 Mar 15 14:21:04
$GME $SONC $NXPI: Why GameStop Corp (GME), Sonic Corporation (SONC) and NXP ...: http://t.co/q81z8jYCWR
Foxchart
2 Mar 15 13:24:11
$GME Poised for breakout over $39.30. Technical 80% chance up. http://t.co/tezMY5iXp7
American Business TV
2 Mar 15 13:23:39
#ABTV #TOPSTOCKS $GME $CBS $AVP $RCL #Nokia CEO Sees no Change to Business Outlook http://t.co/M4D63nRfnl
StockCharts.com
2 Mar 15 13:12:40
Today's Top 5 Technical Gainers among Large Cap Stocks: $BACHF, $CBS, $HOT, $GME, $GMCR http://t.co/ctFzkw6tom #sccrankings #stockcharts
Mark Wilburn
2 Mar 15 12:58:01
Out of $GME today with a great move. got in $COP short last tuesday. Sold 1/2 today for a 40% gain. stopped out of $BBRY Tues for 20% loss.
Extreme Stocks
2 Mar 15 11:21:29
Lucky Jimmy: GME Stock up +2.73% percent Today $GME High is at http://t.co/SvklOxrFMg
OTPicks.com
2 Mar 15 11:12:08
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2 Mar 15 11:12:06
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Lucky Jimmy
2 Mar 15 11:10:17
GME Stock up +2.73% percent Today $GME High is at 38.90 and the Low 37.80 with current volume of 634,538. Game http://t.co/mnSCmugxie
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2 Mar 15 11:09:55
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Market Int Center
2 Mar 15 11:07:19
Potential GameStop $GME Trade Has 7.03% Downside Protection ( http://t.co/3fJW6rMNs9 )
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2 Mar 15 10:42:13
GameStop Corp. Shares Gap Up on Analyst Upgrade $GME http://t.co/9IReTCGptf
Option Alert
2 Mar 15 08:15:19
Notable gainers among liquid option names this morning include $AVP (+4.1%), $HAR (+4.0%), $GME (+3.5%), $STJ (+3.1%), and $BWA (+2.9%),
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2 Mar 15 07:55:18
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2 Mar 15 07:53:00
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Quantcha
2 Mar 15 07:47:46
Synthetic Long Discount Alert: GAMESTOP $GME trading at a 11.42% discount for the 15-Jan-2016 expiration http://t.co/gc89bK67yW
BreakingStocksNews
2 Mar 15 07:37:02
$GME $CZR: The Daily Docket: GameStop to Get 163 RadioShack Locations: http://t.co/syWVi5EqVj
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2 Mar 15 06:44:34
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2 Mar 15 06:43:25
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2 Mar 15 06:38:41
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2 Mar 15 06:34:49
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2 Mar 15 04:24:57
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2 Mar 15 04:24:57
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Analyst Ratings
1 Mar 15 22:16:07
GameStop Corp.'s buy rating reiterated at B. Riley. $64.00 PT. http://t.co/jt35JJmlbO $GME #GME
US Consumer News
1 Mar 15 22:16:05
GameStop Corp.'s buy rating reiterated at B. Riley. $64.00 PT. http://t.co/tZ1cJEkso0 $GME #GME
US Stock Ratings
1 Mar 15 15:57:02
Telsey Advisory Group downgrades $GME from Outperform to Market Perform, target price from $51 to $45 http://t.co/QjA8qgtUj4
ProVesting
1 Mar 15 10:26:03
$GME: Share Price of Gamestop Corporation Drops by -1.39%: http://t.co/kcunas4Pvb
NASDAQ
28 Feb 15 11:45:10
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Dividend Investing
28 Feb 15 11:32:32
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28 Feb 15 11:32:32
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28 Feb 15 11:32:32
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28 Feb 15 11:32:31
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28 Feb 15 09:56:30
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ProVesting
28 Feb 15 08:06:05
$GME $MELI: Bearish runners:GameStop (GME), Mercadolibre (MELI), Abraxas ...: http://t.co/fFjsF0GYpH
Covestor
28 Feb 15 06:05:20
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US Banking News
27 Feb 15 17:16:48
GameStop Corp. Given a $45.00 Price Target at Oppenheimer $GME? http://t.co/OSQSaS85HW
Wall Street Pit
27 Feb 15 12:22:54
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DFW Voices
27 Feb 15 12:10:02
#ICYMI: @GameStop nabs 163 @RadioShack leases for #SpringMobile @ATT push http://t.co/9daBRdCdVf @reuters via @foxbusiness $GME $T $RSH
Breaking News
27 Feb 15 12:02:02
$GME: GameStop Corp. Price Target Raised to $45.00 at Oppenheimer ...: http://t.co/didrxGnOCV
asmara b
27 Feb 15 10:07:06
WSJD: RT djtgallagher: GameStop grabbing 163 RadioShack stores for Spring Mobile outlets - notably not to expand game retail. $GME …
Heard on the Street
27 Feb 15 10:06:48
RT @djtgallagher: GameStop grabbing 163 RadioShack stores for Spring Mobile outlets - notably not to expand game retail. $GME http://t.co/4…
WSJD
27 Feb 15 10:00:12
RT @djtgallagher: GameStop grabbing 163 RadioShack stores for Spring Mobile outlets - notably not to expand game retail. $GME http://t.co/4…
Dan Gallagher
27 Feb 15 09:59:33
GameStop grabbing 163 RadioShack stores for Spring Mobile outlets - notably not to expand game retail. $GME http://t.co/4CWUsGaDyy at @WSJ
Quantcha
27 Feb 15 09:46:03
Synthetic Long Discount Alert: GAMESTOP $GME trading at a 11.27% discount for the 20-Jan-2017 expiration http://t.co/hFf7MKnZdO
NASDAQ
27 Feb 15 09:40:06
$GME - RadioShack's Troubles Feed a Growth Spurt for GameStop http://t.co/D36ZfYV5A6
				
				
  +Follow August 22, 2013 2:09PM
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