GameStop Q2 Profit Rises, Sales Misses View; Shares Down

(RTTNews) - GameStop Corp. (GME) on Thursday reported an increase in second-quarter profit, driven by strong margins. Earnings for the quarter came in line with Wall Street estimates, while revenues fell short of expectations, sending its shares down 8 percent in the extended session.

The video-game retailer lifted its guidance for 2015. GameStop shares gained about 2 percent in after-hours trade on the New York Stock Exchange.

Grapevine, Texas-based GameStop's second-quarter profit rose to $27.9 million or $0.27 per share from $25.3 million or $0.24 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.27 per share.

Sales for the quarter dropped 7.4 percent to $1.63 billion from $1.76 billion a year ago. Analysts had a consensus revenue estimate of $1.72 billion.

GameStop's same-store store sales declined 10.6, with 12.5 percent drop in the U.S. and 5.9 percent internationally.

Game sales were impacted by a lack of new titles to offset strong last year title launches, such as Batman: Arkhman Knight and Elder Scrolls Online, and a decline in hardware sales caused primarily by new information being released about upcoming new consoles.

Gross Margin improved 500 Basis Points to 37.9 percent.

For the third quarter, GameStop expects earnings of $0.53 to $0.58 per share, while analysts expect $0.53 per share.

For the fiscal year 2016, the company continues to expects adjusted earnings of $3.90 to $4.05 per share. Analysts expect earnings of $3.99 per share.

GME closed Thursday's trading at $32.16, up $0.45 or 1.42%, on the NYSE. The stock, however, dropped $2.56 or 7.96% in the after-hours trade.