GameStop’s Q3 results buoyed by hit game sales

While other companies are screaming that the sky is falling, retailer GameStop said Thursday that sales of hot game titles helped boost its third-quarter profits by nearly 12 percent and offset a sales decline for video game hardware in the quarter. These profits just barely helped the company beat Wall Street expectations. Excluding costs, GameStop’s operating profit of 32 cents per share beat a forecast of 30 cents per share.

Net earnings for the quarter that ended on Oct. 13 were $52.2 million - 31 cents per share, up from a profit of $46.7 million - 28 cents per share, in the same period a year ago. Sales in the quarter climbed 8.2 percent to $1.83 billion; analysts estimated $1.73 billion. A year ago the company raked in $1.7 billion.

Sales of new software rose 9.4 percent, and sales of used products jumped 19 percent. These gains helped offset a decline in sales of new video game hardware. But sales at stores open at least a year, which is considered a measure of a retailer’s financial health — fell 7.8 percent. That’s in line with forecast the company offered last week - a decline of 6 - 11 percent.

So what games pulled GameStop’s fanny out of the fire this quarter? According to the company, Madden NFL 10, Halo 3: ODST, Batman: Arkham Asylum, NBA 2K10 and Nintendo’s Wii Sports Resort. Call of Duty: Modern Warfare 2 sold more than 2.5 million copies worldwide in its first 72 hours of release as well.

For the fourth quarter, GameStop expects a profit of $1.47 - $1.65 per share; analysts forecast Q4 profits at $1.57.

NPD to track online game sales

In an article on MCV, NPD Group revealed that it will finally start tracking sales numbers for digitally distributed games.

“It’s a about time,” said James Fudge, consumer and all-American adult male. “It doesn’t take a rocket scientist to realize that online sales are a major portion of overall sales in the U.S.,” he added.

The company plans to track sales data for console, PC and mobile phone games, but how it will track all online game sales will be interesting. Obviously portal like Steam and Direct2Drive will be in the mix, but what about places like Impulse, Good old Games and GamersGate? We’ll have to see how all this is going to work.

GameStop takes a haircut in Q2 2009

It’s not a good day for retailer GameStop, who reported a decline in profits for the second quarter ended August 1, 2009. GameStop’s sales for the quarter were $1.74 billion, down 3.7 percent compared to sales of $1.80 billion in the same period a year ago. The drop in profits can be attributed to less consumer spending on video games and hardware - lower console sales, a lack of strong new software titles and customer caution due to the U.S. economy.

The top five selling games during the quarter were THQ’s UFC 2009 Undisputed, Activision’s Prototype, EA’s Fight Night Round 4 and NCAA Football 2010, and Atari’s Ghostbusters.

Looking ahead, GameStop expects to record lower profits, mainly due to many games being pushed to 2010 like Bioshock 2, StarCraft II and Splinter Cell: Conviction.

For the third quarter of fiscal 2009, GameStop is forecasting diluted earnings per share to range from $0.27 to $0.33, and for the fourth quarter diluted earnings per share from $1.47 to $1.65. For fiscal 2009, GameStop is lowering diluted earnings per share guidance from the previous range of $2.83 to $2.93 to a range of $2.40 to $2.64.