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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
Market Int Center
22 Oct 14 12:28:09
GameStop $GME Showing Resistance Near $41.46 ( http://t.co/x21HRbYU70 )
Quantpost Technology
22 Oct 14 08:30:11
$T News: "GameStop: A Cash-Cow Offering Asymmetric Return $T $WMT $GME …" http://t.co/xRHWqXNEO6 Board view: https://t.co/9Bb5uozwqc
Quantpost Service
22 Oct 14 08:30:11
$WMT $GME News: "GameStop: A Cash-Cow Offering Asymmetric Return $T $WMT $GME …" http://t.co/f1VBoFTDXJ Board view: https://t.co/stGromfRUj
Seeking Alpha
22 Oct 14 08:30:09
GameStop: A Cash-Cow Offering Asymmetric Return http://t.co/b1E7CUtUiD $T $WMT $GME
Anmol Singh
22 Oct 14 07:43:32
Swing I have A LOT of shorts, Might not be a good idea, But I just had to do it. Plan says go for it $AAPL $GME $GLD $SUNE $BRK.B $HON $SPY
Investors Observer
22 Oct 14 06:06:18
Critical Alerts for $HSTM, $VAL, $CIEN, $AEGR and $GME from InvestorsObserver today: http://t.co/qPUF68SG1i #OptionsTrading #CoveredCalls
Julian Close
22 Oct 14 06:06:17
Critical Alerts for $HSTM, $VAL, $CIEN, $AEGR and $GME from InvestorsObserver today: http://t.co/iWYYO1y7X5 #OptionsTrading #CoveredCalls
ZOZO
22 Oct 14 02:41:15
$GME, GME, GME, GameStop management to meet with SunTrust. Meetings to be held in San Francisco on October 22-23 hosted by SunTrust.
Clair Voight
21 Oct 14 11:03:13
$GME After Tanking 20%, Is GameStop Corp. Stock a Buy? http://t.co/kW7PWDnlR4
FonsieTrader
21 Oct 14 04:05:59
Bullish MACD Crossovers 2/4 $EMES $EOG $EZPW $F $FTNT $GCI $GDP $GE $GME $GTE $HK $HP $INFN $IP $IRM $KORS $LB $MEMP http://t.co/Timwypi4OJ
Traders Nation(tm)
21 Oct 14 00:52:48
RT @stockchartscom: Today's Top 5 Technical Gainers among Large Cap Stocks: $GCI, $HAS, $EXPE, $GME, $TSO http://t.co/ctFzkw6tom #sccrankin…
Gabriel Román
20 Oct 14 18:50:12
$GME 46 on an upswing.
RickLejeune
20 Oct 14 18:24:57
Holiday season spending and hiring will increase, surveys find http://t.co/EeXHnOo9pZ $AMZN $WMT $M $KSS $GME
StockCharts.com
20 Oct 14 13:08:46
Today's Top 5 Technical Gainers among Large Cap Stocks: $GCI, $HAS, $EXPE, $GME, $TSO http://t.co/ctFzkw6tom #sccrankings #stockcharts
Точка Входа.Трейдинг
20 Oct 14 11:00:13
Чем мы торгуем / / $GME / / #трейдинг #nyse #nasdaq #биржа #gamestop http://t.co/GKbbUwq0Q0
US Banking News
20 Oct 14 10:57:42
Zacks Reiterates “Neutral” Rating for GameStop Corp. $GME http://t.co/kW5ZsxlE5S
InterCooler
20 Oct 14 10:51:26
GameStop Corp. Receives “Neutral” Rating from Zacks $GME http://t.co/azxCwMYNjI
StockSpotter
20 Oct 14 10:44:58
$GME up 1.1% to 40.31 possible bullish reversal? #stocks #options #trading http://t.co/nrCXrRWjPe
Sleek Money
20 Oct 14 10:39:08
Zacks Reaffirms Neutral Rating for GameStop Corp. $GME http://t.co/w3UP5y6dXL
Alexander Morris
20 Oct 14 10:27:32
$GME: At 1WkHIGH=40.36, hits:4, Rng:11%, ch:+1.3%[1.1%offHi], tf:0110011, MedFlt[110.1M], HiPctSht[31%:7d], PrvClGap-[-0.6%]
US Consumer News
20 Oct 14 10:15:04
GameStop Corp.'s neutral rating reiterated at Zacks. $42.00 PT. http://t.co/qv2H0QW6UP $GME #GME
Analyst Ratings
20 Oct 14 10:09:42
GameStop Corp.'s neutral rating reiterated at Zacks. $42.00 PT. http://t.co/kkVaeV66UL $GME #GME
Alex Liauska
20 Oct 14 08:50:29
$GME things are looking up. UP.
FonsieTrader
20 Oct 14 08:48:56
$GME Long over $40.97 http://t.co/6ciz2YFsOb
Alexander Morris
20 Oct 14 06:45:04
$GME: Exc 1WkHIGH=40.36, hits:2, Rng:11%, ch:+1.4%, 5NewHi:BrkPLo+PHi[+3.5%], 8:2Accel+, tf:0100111, MedFlt[110.1M], HiPctSht[31%:7d]
PostingMyTrades
20 Oct 14 06:06:49
Expire 6 $GME Oct17 40 P +$462 Assignment Bought 600 $GME @ $40.00
Marketwizemedia
20 Oct 14 03:37:31
RT @SeekingAlpha: Short Sellers Catch Recent Downturn http://t.co/o3dJlXdhwo $CLF $GME $ADT $X $BTU $VRSN $WU $KSS $DO $PBCT
Quantpost Service
20 Oct 14 03:36:10
$GME News: "Short Sellers Catch Recent Downturn $CLF $GME $ADT $X $BTU $VRSN …" http://t.co/47UtmN95Eh Board view: https://t.co/t0K2USYXZv
Quantpost Basic Mats
20 Oct 14 03:36:10
$CLF $X News: "Short Sellers Catch Recent Downturn $CLF $GME $ADT $X $BTU …" http://t.co/p6qB5zXsEP Board view: https://t.co/G7j06dGk3O
Seeking Alpha
20 Oct 14 03:36:08
Short Sellers Catch Recent Downturn http://t.co/o3dJlXdhwo $CLF $GME $ADT $X $BTU $VRSN $WU $KSS $DO $PBCT
TickerChirp
18 Oct 14 17:34:03
Hot Tweets Pertaining to $GME (GAMESTOP CORP symbol gme) on 10/19/2014 http://t.co/KsSe5203R2
US_proptrader
17 Oct 14 11:43:28
$AHPI $GLNG $GME $INO $MWW $P autocharts @ http://t.co/hj7PGeTQk3
Gabriel Román
17 Oct 14 11:13:31
@johnilini $GME
Quantpost Service
17 Oct 14 10:55:35
$GME News: "EA and GME rally, ATVI and TTWO underperform following NPD data…" http://t.co/lx1QJWhYXG Board view: https://t.co/t0K2USYXZv
MarketCurrents
17 Oct 14 10:55:35
EA and GME rally, ATVI and TTWO underperform following NPD data http://t.co/wWPwxI53Lg $TTWO $SNE $GME $EA
Alexander Morris
17 Oct 14 10:22:40
$GME: At 1WkHIGH=40.16, hits:2, Rng:11%, ch:+2.4%, tf:0111001, MedFlt[110.1M], HiPctSht[30%:8d], PrvClGap+[+1.2%], DyVol:1.65M:0.4x:0.4x
Trefis.com
17 Oct 14 09:42:18
Weekly Notes On Gaming Industry: Activision Blizzard, GameStop & Electronic Arts http://t.co/maSEbvs0pp by Trefis Team $ATVI $ERTS $GME
US_proptrader
17 Oct 14 09:07:38
$CMRX $CSTM $GLNG $GME $HDS $HZNP $JCP $ODP $TSLA autocharts @ http://t.co/hj7PGeTQk3
Ben Silverberg
17 Oct 14 02:47:25
Expect some downside on Piper Jaffray note Sept NPD video game software sales dropped 36% YoY. $ATVI $EA $GME $TTWO http://t.co/KE2ex518Od
The Fly
17 Oct 14 02:39:07
$ATVI $EA $GME $TTWO September NPD video game software sales fell 36%, says Piper Jaffray: Full Story http://t.co/PsDshsHGrP
Alisa Strategy®
16 Oct 14 17:26:51
#FTR1 VARIAS ACCIONES DEL MERCADO AMERICANO CON MOVIMIENTO ALCISTA $GME $JNPR $SLB $UPS $ADBE $NVDA
Daniel Ernst
16 Oct 14 15:14:18
19% of Super Smash Sold digital is important, Nintendo's App store is not easy to use. This bodes well (poor for $GME) digital on PS4 XBONE
Stock Signaling
16 Oct 14 14:31:47
Upgraded Stocks Trading in a New Range: $EQM $SUNE $VNOM $NFLX $SSYS $GLOG $GPOR $CAVM $SXL $NS $ZINC $MMP $EGHT $GME $SFUN #nasdaq #dow
Stock Signaling
16 Oct 14 11:31:35
Upgraded Stocks Trading in a New Range: $EQM $SUNE $VNOM $NFLX $SSYS $GLOG $GPOR $CAVM $SXL $NS $ZINC $MMP $EGHT $GME $SFUN #analyst #nyse
Ticker Report
16 Oct 14 09:58:58
Hilliard Lyons Upgrades GameStop Corp. to “Neutral” $GME http://t.co/kjLPeTjXh1
TV_Trading Ideas
16 Oct 14 09:31:12
GME $GME http://t.co/QYXuLoaShA
12Stocks.com
16 Oct 14 08:52:14
S&P500 #Stocks Performance $CHK $UNH $ADS $TWX $SNA $CNX $THC $GME $XLNX $COG $WLP $WMB $VLO $APC $ITW more@ http://t.co/RPeaHBZz9y
Alexander Morris
16 Oct 14 08:03:37
$GME: At 1WkHIGH=39.86, hits:3, Rng:10%, ch:+3.6%, PrvCHi, PDayGp-, tf:0111110, FirmTrnd--:+150%, MedFlt[110.1M], HiPctSht[30%:8d]
John Turner
16 Oct 14 08:02:21
$GME Is GameStop A Good Investment? http://t.co/azm5kqqUAs
Zero Filter
16 Oct 14 07:25:22
No clue 3Q results but crowded eternal shorts $GME need to carefully listen calls / read releases to see how smart / well run #seekingalpha
				
				
  +Follow August 22, 2013 2:09PM
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