GameStop Posts 23 Percent Drop In Earnings
GRAPEVINE (AP) - GameStop Corp., the world’s largest video game retailer, posted a 23 percent drop in second-quarter net income Thursday and said its revenue at stores open at least a year plunged 9.1 percent due to weak hardware sales and a lackluster game release schedule.
The results sent shares down nearly 7 percent in morning trading.
The company earned $30.9 million, or 22 cents per share, for the three months that ended July 30. That’s down 23 percent from $40.3 million, or 26 cents per share, in the same period a year earlier.
Revenue fell 3 percent to $1.74 billion from $1.8 billion.
Analysts, on average, were expecting earnings of 21 cents per share on revenue of 1.81 billion, according to a poll by FactSet.
For the current quarter, GameStop is forecasting earnings of 38 cents to 41 cents per share. Analysts are expecting 38 cents per share.
For the full year, it still expects to earn $2.82 to $2.92 per share. But the company lowered its outlook for revenue for stores open at least a year. The measure is a key indicator of a retailer’s health because it excludes stores that recently opened or closed. GameStop now expects an increase of 1 percent to 3 percent, below its earlier guidance of an increase of 3.5 percent to 5.5 percent.
The company said sales of new games didn’t do as well as expected, though sales of used games grew 12 percent and sales of digital content, such as game downloads, grew 69 percent.
GameStop’s shares fell $1.39, or 6.8 percent, to $19.07 in morning trading. The stock has traded in the 52-week range of $17.70 and $28.66.
(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)