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GameStop shares plummet on bleak outlook

Wednesday, November 2, 2016 9:37
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(Before It's News)

Games and electronics retailer GameStop Corp (NYSE:GME) said underperforming gaming titles would hit third quarter profits and earnings, sending shares in the stock plummeting by more than 10%.

In its preliminary results for the period to the end of September, GameStop indicated that it expects earnings per share somewhere between US$0.45-US$0.49, below market forecasts of US$0.56.

Likewise, the company expects to report revenues of US$2bn, again missing expectations of US$2.08bn.

As a result of the weak performance, GameStop also lowered its full year forecasts.

It now expects to report a full year per share profit of between US$3.65 to US$3.80, and predicts a 6.5% to 9.5% drop in comparable store sales this year. Wall Street had been looking for earnings per share of US$3.99.

“Our expectation was that the new titles released in October would provide a catalyst for new software sales, but despite gaining market share, the titles underperformed our forecasted sales,” said chief executive Paul Raines.

“While the Technology Brands and Collectibles segments continue to grow rapidly, they will not offset the decline in gaming this quarter.”

Shares in GameStop fell more than 11% to US$20.90.

Story by ProactiveInvestors

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