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.

Japanese hardware sales for Sept. 14 - 20, 2009

Japanese hardware sales are in for the week of Sept. 14 - 20, 2009, with the DSi continuing to top the hardware sales charts in that region with right around 66k units sold for the week - according to data from Media Create.

The PS3 came in at a respectable 55k, followed by the PSP at 21k, the Wii with over 16k in sales, the DS at 13k the Xbox 350 at just under 5K and the PS2 at over 2k. Pokémon Heart Gold and Soul Silver editions for the Ds probably didn’t hurt DS/DSi sales for the week. Full list below:

- DSi: 66,073

- PS3: 51,055

- PSP: 21,073

- Wii: 16,698

- DS Lite: 13,555

- Xbox 360: 4,965

- PS2: 2,723

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.

March Hardware Sales Weak

While the Wii continued to sell well in North America during the month of March, it was the Xbox 360 that was up from March 2008 numbers, according to NPD Group. The Wii sold 601,000 units in March followed by the DS (563K), Xbox 360 (330K), PS3 (218K), PSP (168K), and PS2 (112K). The numbers aren’t all that shocking considering when East fell this year and take into account that the Wii had Mario Kart Wii driving sales in the same period last year. In general the entire business was down in march - from hardware to software and all stops in between.

1. Wii 601K
2. Nintendo DS 563K
3. Xbox 360 330K
4. PlayStation 3 218K
5. PSP 168K
6. PlayStation 2 112K

Video game hardware sales were $552.04 Million USD - down by 18 percent, while accessories sales were $217.55 million down by about 15 percent.

While it would be easy for some watching the game space to be concerned about this, NPD Group says that this is do more to timing, availability of killer software and other factors than it is about the economy or consumer spending. It will be interesting to see how these numbers compare to April.