Market Overview

GameStop Bouncing after Earnings, Amid Weak Q1 Guidance


Shares of GameStop (NYSE: GME) are seeing a slight reversal after initially trading about 2.5% lower after reporting fourth quarter results, which were essentially in-line with analysts' estimates. Traders initially keyed in on sales guidance for the first quarter of 2012, which seem weak.

GameStop reported fourth-quarter EPS of $1.73 versus the estimated $1.72 per share, beating by +0.6%. Revenues came in at $3.58B versus the estimated $3.72B, missing by -3.8%.

The company guided 2012 full year earnings per share between $3.10-3.30 versus analyst expectations of $3.16 per share. GameStop also guided 2012 first quarter EPS $0.52-0.55 vs $0.59 estimate, with sales expected 7.5-9.5% lower.

Paul Raines, chief executive officer, stated, “In 2011, GameStop outperformed the video game market through disciplined execution of its core business and strategic initiatives. For 2012, we project operating earnings growth based on the continuation of our transformation, led by our strong pre-owned business, expanding digital offerings and emerging mobile categories.”

For 2012, in the U.S., GameStop expects to open approximately 100 new stores and close 150 stores. Internationally, the company expects to open stores opportunistically while keeping square footage flat.

Currently, shares of GameStop are trading up about 2.5%, in Thursday's pre-market session, at $25.30 per share.

Posted-In: Earnings News Guidance Pre-Market Outlook Movers


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