The video-game chain GameStop Corp. posted quarterly profit that surpassed estimates, bumping shares higher in afterhours trade. Results were boosted by next-gen consoles sales, which helped the companys hardware sales.
According to the companys statement, its net income increased more than two times on an annual basis to $24.6 million, or $0.22 per share, beating expectations of $0.18 per share, on revenue of $1.73bn, which added 25%.
The key driver for earnings this quarter were consoles, the so-called “next-gen” machines of Sony and Microsoft, the PlayStation 4 and Xbox One, respectively.
“The faster-than-anticipated uptake of new consoles, as well as the remaining software lineup, bode well for the company,” Michael Olson, analyst at Piper Jaffray & Co., said in a note before the report.
The companys shares were up as much as 11% in afterhours trading.
The Grapevine, Texas-based retailer confirmed its projection of between $3.40 and $3.70 earnings per share for the year. The company, however, upgraded the third-quarter same-store sales increase to between 1% and 5%, and earnings between $0.58 and $0.64 per share.
Tony Partel, President of GameStop Corp., said that 24 major games are to be released during this years holiday season, calling them “the best lineup in history”.
GameStop Corp. was 2.03% down to close at $40.49 per share yesterday, marking a one-year change of -14.97%, valuing the company at $4.61bn. According to CNN Money, the 17 analysts offering 12-month price forecasts for GameStop Corp. have a median target of $52.00, with a high estimate of $64.00 and a low estimate of $30.00. The median estimate represents a +28.43% increase from the last price of $40.49.