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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
12Stocks.com
31 Oct 14 16:21:00
S&P500 #Stocks Performance $MCHP $ADI $EMN $TSO $EXPE $LLTC $MHK $TXN $PCLN $MU $STX $SNDK $GME $MYL $KLAC more@ http://t.co/RPeaHBZz9y
gordon gekko is god
31 Oct 14 14:30:09
Video game stocks adds to gains after Sony reports strong PS4 sales http://t.co/9klZjHMfaa $SNE, $EA, $ATVI, $TTWO, $GME, $AMD
Dan Nathan
31 Oct 14 13:28:29
ICYMI: Thursday's Notable Options Activity: $INTC, $AMAT, $TXN, $WAG, $GME http://t.co/6DEuLPxckn @EnisTaner
and...
31 Oct 14 10:10:14
$EA , $TTWO rallied after earnings. $ATVI reports11/4, but moving up on industry news already. $GME reports 11/20 - short squeeze soon?
Daily Contracts
31 Oct 14 09:47:01
Real-Time feed of company contracts, original agreements and executive updates from GameStop $GME http://t.co/YwaRY20lr4
Shiraz
31 Oct 14 09:21:08
$GME on fire, this is the best day ever
George Avidon
31 Oct 14 08:42:49
@TheTradeXchange Great resource for #options $NUAN $GME http://t.co/ximyqCkKcO
George Avidon
31 Oct 14 08:33:46
RT @TheTradeXchange: $GME Nov 40puts 2778 @$1.20
TradeXchange
31 Oct 14 08:33:27
$GME Nov 40puts 2778 @$1.20
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31 Oct 14 06:10:11
@jimcramer is $GME a buy into the holidays following $TTWO success? @MadMoneyOnCNBC
Trade4Me
31 Oct 14 05:22:45
Buying triggers : $BBY $33.65 , $GME $42.46 Seeing is Believing https://t.co/BrkOfQmdTK
Don Fishback
31 Oct 14 04:34:43
1 Week Increase in ATM IV (Point change) $ARCP, $RCAP, $GDP, $SALE, $GME http://t.co/UyntP3LT9Z
OptionApps
31 Oct 14 04:34:43
1 Week Increase in ATM IV (Point change) $ARCP, $RCAP, $GDP, $SALE, $GME http://t.co/Old3lagTLP
.
31 Oct 14 03:43:20
RT @RiskReversal: Thursday's Notable Options Activity: $INTC, $AMAT, $TXN, $WAG, $GME http://t.co/6DEuLPxckn @EnisTaner
DR JAMES CABOT
31 Oct 14 03:30:32
RT @RiskReversal: Thursday's Notable Options Activity: $INTC, $AMAT, $TXN, $WAG, $GME http://t.co/6DEuLPxckn @EnisTaner
Dan Nathan
31 Oct 14 03:28:27
Thursday's Notable Options Activity: $INTC, $AMAT, $TXN, $WAG, $GME http://t.co/6DEuLPxckn @EnisTaner
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30 Oct 14 23:54:33
Partner Jet $PJT.V is up 183% this week after Q3 release with more gains coming. Find out why: http://t.co/MEpEjkCm4H $FBHS $ABMD $GME
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30 Oct 14 16:55:03
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30 Oct 14 10:45:05
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Livevol Community
30 Oct 14 10:45:04
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Thomas Rice
30 Oct 14 10:28:34
$GME above 42 again
Alexander Morris
30 Oct 14 08:41:22
$GME: Exc 1DyHIGH=41.83, hits:4, ch:+0.8%, 6:1Accel+, allTFs+, MedFlt:110M, HiPctSht[31%:9d], DyVol:343T:0.2x:0.1x, DyRng:1.6%:0.7x:0.5x
Craig Bujnowski
30 Oct 14 07:15:16
Most Heavily Shorted Stocks $GME $OUTR $DDD $SUNE $VECO $CVC http://t.co/av5DV7orBL http://t.co/b0LPQXUWJi
$Stocknewsalerts
30 Oct 14 06:02:34
$GME GameStop Corp. Announces Third Quarter 2014 Earnings Release Date and Conference Call Webcast From our Stock News Alerts App
BV Services
30 Oct 14 06:00:46
$GME GameStop Corp. Announces Third Quarter 2014 Earnings Release Date and Conference Call Webcast.. http://t.co/n8mtwlLlFw
Jon Ruder
30 Oct 14 05:11:14
Sell side worried abt $WMT getting into used games biz is non event at least based on my 10yo and his friends. $GME still place to go.
Market Int Center
30 Oct 14 05:05:27
Potential GameStop $GME Trade Has 7.06% Downside Protection ( http://t.co/SjXYj9KSWC )
Charts 123
30 Oct 14 04:40:27
Buy Signal: $BRFS $CALX $CAVM $DANG $EMES $ERJ $FLML $GLNG $GME $GPRE $NNBR http://t.co/Hva8GW9gk1 #stocks
IVolatility
30 Oct 14 03:32:10
Stocks with implied volatility above IV index mean; GameStop $GME 54, Keurig Green Mountain $GMCR 51
wininstocks2014
30 Oct 14 02:50:40
GME 41.53 Stock Charts $GME GameStop Corp. Cl A (NYSE) Last Updated: 10/30/2014 04:50:47 GME Stock Chart - 1 M http://t.co/dOvjJURCWK
HotKeyTrading
29 Oct 14 23:00:06
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29 Oct 14 11:00:05
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OPTIONS/STOCK EXPERT
29 Oct 14 10:18:38
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IVolatility
29 Oct 14 09:08:44
GameStop $GME implied volatility of 52 at upper end of index mean range
BNK Invest
29 Oct 14 08:49:53
First Week of December 20th Options Trading For GameStop $GME #stockoptions http://t.co/MmG4lers5v
HotKeyTrading
29 Oct 14 07:30:05
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Sam Sa
29 Oct 14 07:27:45
$GME recovered almost all of the losses from yesterday's Wal-Mart "news"
Sven
29 Oct 14 06:21:29
RT @theflynews: GameStop retreats after Wal-Mart begins selling used video games $GME $WMT $ATVI: Full Story http://t.co/YYvoOSRcBc
David (no relation)
29 Oct 14 06:19:39
RT @theflynews: Analysts do not think $WMT selling used video games is major threat to $GME, which is down 5% today. Our breakdown: http:/…
Cal
29 Oct 14 06:19:09
RT @theflynews: GameStop weakness on Wal-Mart news a buying opportunity, says Piper Jaffray $GME $WMT: Full Story http://t.co/6zs2oAbpKa
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29 Oct 14 06:10:03
GameStop : and St. Jude Children’s Research Hospital® Invite Consumers to Play it Forward During the ... http://t.co/ZVOlTVRqQn $GME
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29 Oct 14 06:02:34
$GME GameStop and St. Jude Children’s Research Hospital® Invite Consumers to Play it Forward During th.. http://t.co/rYXJ5LqLfX
$Stocknewsalerts
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$GME GameStop Announces Rights Agreement Expired -Form 15
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$Stocknewsalerts
29 Oct 14 03:11:23
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28 Oct 14 23:00:05
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  +Follow August 22, 2013 2:09PM
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