GameStop investors play Beat Down The Stock after earnings release
GameStop, the entertainment software retail chain headquartered in Texas, saw its shares get clobbered Thursday despite reporting a 151 percent jump in net profits to $62.1 million on a 42 percent gain in sales to $1.8 billion in its first quarter, compared with $24.7 million in net profit in the year-before quarter on $1.3 billion in sales.
It’s shares ended the day down $1.87, or 3.7 percent, to $48.97, marking their fifth daily
drop in a row in very heavy trading (some 17 million shares traded hands Thursday , a more than four-fold increase from the day before).
Wall Street was evidently disappointed that the company indicated sales growth will slow the rest of year. It forecast year-over-year growth of between 12 to 14 percent in its current quarter, and 10 to 12 percent for the full year, down from the 27 percent gain in its most recent quarter. (Comparisons in the company’s third quarter will be measured against the year-before quarter during which the record-setting Halo 3 game from Microsoft was released last September.)
Take-Two Interactive’s Grand Theft Auto IV was reported to be GameStop’s top-selling game during the quarter just ended on May 3, with only five days of sales following its late-April release.
1 comment
Brad O'Neill
The stock got clobbered before earnings were even released it was in free fall after release fell to around 45 dollars, looked dead during conference call and then had a strong rally for most of the afternoon ending at 48.85 a whole 85 cents over its premarket price paid by yours truly! I just have to say a most exciting stock! by the way the ceo said this was the most optimistic he has felt about this company in a while and they spent some serious money on some infrastructure issues on new stores in europe and an upgrade to their video game repair facility which will add to their bottom line on down the road. Another little snippet of the conference call was they had very high turn ins of used games when GTA 4 went on sale these games will return higher margins than the new games they are selling so second quarter might just beat their guidance.(my words not theirs they are very conservative in giving guidance.)
May 22, 2008