GameStop Misses Q3 Views, Shares Drop

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dipped more than 10 percent in pre-market trading after the company reported weaker-than-expected results for the third quarter. The Grapevine, Texas-based company reported quarterly net earnings of $55.9 million, or $0.53 per share, versus $56.4 million, or $0.50 per share, in the year-ago quarter. Excluding the one-time charges, the company's adjusted earnings slipped to $0.54 per share from $0.57 per share. Its total global sales slipped 3.6 percent to $2.02 billion. However, analysts were expecting earnings of $0.59 per share on revenue of $2.14 billion. The average estimate among 81 Estimize users was for earnings of $0.61 per share and revenue of $2.13 billion. Consolidated global comparable store sales shrank 1.1 percent for the quarter. In the new video game segments, GameStop's new hardware sales fell 20.4 percent, while new software sales dropped 9.3 percent. Technology Brands revenue climbed 64.2 percent. During the third quarter, GameStop repurchased $44.9 million of common stock at an average price of $43.85 per share. The company's board of directors declared a quarterly cash dividend of $0.36 per share. Paul Raines, chief executive officer, stated, "Our third quarter results were at the low end of our guidance range due to lower than expected new software and hardware sales and delays in Technology Brands store openings; however, our expectations for the full year have not changed." For the fourth quarter, GameStop projects adjusted earnings of $2.12 to $2.32 per share and comparable store sales growth of -1.0 percent to +6.0 percent. Analysts expected earnings of $2.37 per share. For the full year, GameStop reiterated full year adjusted earnings of $3.66 to $3.86 per share, and comparable store sales growth of 2.0 percent to 6.0 percent. GameStop shares fell 10.47 percent to $35.30 in pre-market trading.