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GameStop 4Q earnings grow, revenue edges lower

Thu, 03/28/2013 - 12:45pm
The Associated Press

Video game retailer GameStop Corp. said Thursday that its fiscal fourth-quarter net income grew, surpassing analysts' expectations to cap what CEO Paul Raines nonetheless called a "challenging year" for console gaming.

The company's forecast for the current quarter fell shy of Wall Street's predictions.

GameStop earned $261.1 million, or $2.15 per share, in the three months that ended on Feb. 2. That's up from $174.7 million, or $1.27 per share, in the same period a year earlier. Adjusted earnings were $2.16 per share in the latest quarter.

Revenue dipped about half of a percent to $3.56 billion from $3.58 billion in the same period a year earlier.

Analysts, on average, were expecting earnings of $2.09 per share on revenue of $3.46 billion, according to a poll by FactSet.

Revenue in stores open at least a year fell 4.6 percent. The metric is a key indicator of a retailer's health because it excludes the impact of locations that have recently opened or closed. The company operates 6,602 stores in 15 countries worldwide.

GameStop President Tony Bartel said in a statement that the company is "bullish" about the next video game console cycle. In addition to Nintendo's Wii U, which launched late last year, and Sony Corp.'s PlayStation 4, which is coming later this year, Microsoft Corp. is expected to unveil its next video game console in the coming months.

For the current quarter, GameStop is expecting earnings of 38 cents to 43 cents per share, compared with analysts' expectations of 55 cents per share. It expects revenue to decline by 8.5 percent to 6 percent compared with a year earlier. Analysts are expecting $1.96 billion in revenue, a 2 percent decline from $2 billion.

"The video game industry is anticipating a strong finish to 2013 with the release of 'Grand Theft Auto V' and the launch of at least one next generation console by holiday," GameStop said in a statement. "Ahead of these events, GameStop expects the first half of the year to be challenging as consumers postpone purchases leading up to the fourth-quarter console launch."

For the full year, GameStop is expecting earnings of $2.75 to $3.15 per share. Analysts are forecasting $3.38 per share.

Shares of Grapevine, Texas-based GameStop climbed 84 cents, or 3.2 percent, to $27.29 in midday trading. The stock has traded between $15.32 and $28.35 in the past year.

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