GameStop shares jump despite big third-quarter loss
Grapevine-based GameStop reported a big loss for the third quarter after taking $679 million in write-downs, but also said it expects the holiday season to produce slightly better profits than analysts are predicting for the fourth quarter. GameStop’s shares (ticker: GME) were up more than 4 percent in early trading on the news.
The world’s biggest video-game retailer said third-quarter sales were off 8.9 percent in the third quarter, to $1.77 billion, compared to a year earlier. It blamed the drop on an unusually strong 2011 third quarter that saw the introduction of “major new software titles.” Its net loss for the quarter was $624 million after the non-cash write-downs, which included $627 million in goodwill and $52 million in asset impairments. The company said the actions were based on a decline in its share price in the second quarter and on its international operations. Not counting the write-downs, GameStop earned $47 million in the quarter, or 38 cents a share, which topped Wall Street estimates by 2 cents.
It said that despite a “tough video-game market,” it expects to earn between $2.07 to $2.27 a share in the fourth quarter. The midpoint of that range, $2.17, is 1 cent above the average of estimates compiled by Bloomberg News. A wild card is the scheduled Sunday release of Nintendo Co.’s new Wii U, the slumping video-game industry’s first new home console in six years.
-- Jim Fuquay