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GameStop’s Q4 Profit Falls On Charges

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GRAPEVINE (AP) - GameStop Corp., the world’s largest video game retailer, said Thursday its fourth-quarter profit dropped 27 percent, pulled down by hefty charges and lower sales.

For the quarter ended Jan. 28, Grapevine, Texas-based GameStop earned $174.7 million, or $1.27 per share, down from $237.8 million, or $1.56 per share, in the same quarter of 2010.

The recent quarter’s results included $64.6 million in asset impairment and restructuring charges. Excluding those items, the company said it posted an adjusted profit of $1.73 per share.

Revenue fell 3.1 percent to $3.58 billion from $3.69 billion, as sales at stores open at least a year dropped 3.6 percent. The metric is a key gauge of a retailer’s health, because it excludes sales at stores that have opened or closed in the past year.

The adjusted profit was in line with Wall Street predictions, while the sales fell short.

Analysts, on average, expected a profit of $1.73 per share on $3.69 billion in revenue, according to a FactSet poll. Analysts’ estimates usually exclude one-time charges.

For the full year 2011, GameStop earned $339.9 million, or $2.41 per share, down from $408 million, or $2.65 per share, in 2010. Revenue rose to $9.55 billion from $9.47 billion.

GameStop said it expects its 2012 results to be driven mainly by higher sales of digital products, used video games and mobile business projects.

For the current quarter, the company said it expects a profit of 52 cents to 55 cents per share on a sales drop of between 7.5 percent and 9.5 percent. Based on the company’s year-ago sales of $2.28 billion, the guidance implies first-quarter sales of $2.06 billion to $2.11 billion.

Analysts polled by FactSet expect a first-quarter profit of 58 cents per share on $2.27 billion in sales.

For the full year 2012, GameStop said it expects to earn between $3.10 to $3.30 per share on sales growth of between 1 percent and 5 percent. Based on the company’s 2011 sales, the guidance implies 2012 sales between $9.65 billion and $10.02 billion.

Analysts, on average, expect a profit of $3.15 per share on $9.88 billion in sales.

The company operates 6,683 stores in 17 countries and expects to open about 100 new stores in the U.S. during 2012, offset by the closing of about 150 domestic stores.

GameStop shares rose 47 cents to $25.14 in morning trading.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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