GameStop Earnings: Here’s Why Shares are Up Now

GameStop Corp. (NYSE:GME) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 1.25%.

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GameStop Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 24.86% to $2.16 in the quarter versus EPS of $1.73 in the year-earlier quarter.

Revenue: Decreased 0.46% to $3.56 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: GameStop Corp. reported adjusted EPS income of $2.16 per share. By that measure, the company beat the mean analyst estimate of $2.09. It beat the average revenue estimate of $3.45 billion.

Quoting Management: Paul Raines, chief executive officer, stated, “While 2012 was a challenging year for console gaming, we focused on factors within our control. We expanded our market leadership position, maintained our financial strength and controlled our spending. Perhaps most importantly, we invested in our mobile and digital businesses to position the company for future success. These channels delivered as planned and significantly contributed to our highest ever gross margin and profitability.”

Key Stats (on next page)…

Revenue increased 100.93% from $1.77 billion in the previous quarter. EPS increased 468.42% from $0.38 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.61 to a profit $0.56. For the current year, the average estimate has moved down from a profit of $3.20 to a profit of $3.12 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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