GameStop Q2 Profit Tops Expectations, Shares Rise
Shares of GameStop Corp. (NYSE: GME) gained over 3 percent in after-hours trading after the company reported better-than-expected earnings for the second quarter and lifted its forecast for the full year.
The Grapevine, Texas-based company posted quarterly net earnings of $25.3 million, or $0.24 per share, compared to $24.6 million, or $0.22 per share, in the year-ago quarter. The company's adjusted earnings came in at $0.31 per share.
Total global sales increased 1.8 percent to $1.76 billion. However, analysts were expecting a profit of $0.25 per share on revenue of $1.74 billion.
The average estimate among 25 Estimize users was for earnings of $0.26 per share and revenue of $1.75 billion.
Its consolidated global comparable store sales climbed 8.1 percent in the quarter. Comparable store sales surged 10.8 percent in the U.S. and rose 1.8 percent internationally.
In the video games segments, new hardware sales slipped 2.2 percent, new software sales dropped 6.0 percent, while pre-owned sales rose 0.5 percent.
Sales in the Mobile and Consumer Electronics category jumped 26.9 percent to $142.2 million in the quarter.
During the quarter, GameStop repurchased 1.41 million shares at an average price of $43.04 per share.
Paul Raines, chief executive officer, said, "Results for the second quarter again exceeded our expectations, reflecting the mix of sales in our market-leading video game business and the continuing success of our diversified segments. During the quarter, we increased the number of Technology Brands stores by 33% and completed the acquisition of Geeknet, continuing the expansion of our non-gaming businesses. We are excited about the growth prospects of these businesses and expect them to deliver sustained profits over the next several years."
For the third quarter, GameStop projects earnings of $0.53 to $0.60 per share and comparable store sales growth of 1.0 percent to 4.0 percent.
For fiscal year 2015, GameStop now expects adjusted earnings of $3.66 to $3.86 per share, versus earlier forecast of $3.63 to $3.83 per share. It now expects comparable store sales growth of 2.0 percent to 7.0 percent.
GameStop shares rose 3.46 percent to $47.80 in the after-hours trading session.
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