GameStop Corp. Posts Strong Results
GameStop (GME, 27.97) posted strong fourth quarter results, led by strong sales of next generation consoles and games, and offered an outlook that exceeded Wall Street's expectations. Investors, in turn, lifted shares of the videogame retailer, which were up nearly 13% in pre-market activity.
The stock is up about 56% since bottoming last June, and is poised for further gains, as the company captures momentum from the new hardware cycle. Given GameStop's solid industry footing and a favorable outlook for the video game industry, as next-generation consoles build out their user base, we would continue to be buyers of the stock, which is up more than 78% since we first highlighted our bullish opinion.
For the most recent quarter, net income totaled $129.8 million, or $0.81 per share, compared with $85 million, or $0.55 per share, in the same period last year. Excluding debt retirement costs, earnings were $0.82 per share - two cents better than analysts' expectations.
Sales jumped 38.2% year/year to $2.3 billion, also beating the consensus estimate of $2.13 billion. On a comparable store basis, sales increased 26.5% during the quarter, helped by strong sales in January of Vivendi's World of Warcraft and new video game software.
Based on the latest results and expected strong video game industry fundamentals, GameStop projected first quarter earnings in a range of $0.15 to $0.16 per share, versus analysts' estimate of $0.13 per share. For the fiscal year, the company sees earnings of $1.37 to $1.40 per share on sales growth between 19% and 21%. Analysts are looking for full-year earnings of $1.34 per share. Longer term, GameStop expects earnings per share to grow at least 25% annually in fiscals 2008 and 2009.
--Richard Jahnke, Briefing.com
The stock is up about 56% since bottoming last June, and is poised for further gains, as the company captures momentum from the new hardware cycle. Given GameStop's solid industry footing and a favorable outlook for the video game industry, as next-generation consoles build out their user base, we would continue to be buyers of the stock, which is up more than 78% since we first highlighted our bullish opinion.
For the most recent quarter, net income totaled $129.8 million, or $0.81 per share, compared with $85 million, or $0.55 per share, in the same period last year. Excluding debt retirement costs, earnings were $0.82 per share - two cents better than analysts' expectations.
Sales jumped 38.2% year/year to $2.3 billion, also beating the consensus estimate of $2.13 billion. On a comparable store basis, sales increased 26.5% during the quarter, helped by strong sales in January of Vivendi's World of Warcraft and new video game software.
Based on the latest results and expected strong video game industry fundamentals, GameStop projected first quarter earnings in a range of $0.15 to $0.16 per share, versus analysts' estimate of $0.13 per share. For the fiscal year, the company sees earnings of $1.37 to $1.40 per share on sales growth between 19% and 21%. Analysts are looking for full-year earnings of $1.34 per share. Longer term, GameStop expects earnings per share to grow at least 25% annually in fiscals 2008 and 2009.
--Richard Jahnke, Briefing.com
Labels: GameStop Corp., GME
posted by Stock Administrator @ 8:08 PM
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