GameStop reports solid Q3 earnings

Even with the busiest shopping season yet to come, game sales already impress. GameStop recently announced a 39 percent jump in third-quarter profits (for the August-to-October quarter) over last year's numbers. The Texas-based video game retailer reported a net income of $13.8 million for this year's third-quarter period, versus $10.7 million from the same period last year, or 24 cents per share versus 18, respectively. Reportedly, the 24 cents per share met Thomson First Call analysts' survey expectations.

GameStop had $416.7 million in overall sales, up 28 percent from the same quarter a year ago. Same-store sales also showed a marked improvement, up 12 percent from last year's ­1.9 percent gain. Software sales were particularly strong, up 36 percent.

The software sales figures were headlined by newcomer Fable, from Microsoft, and the latest installments of perennial sales-chart juggernauts Madden 2005, from Electronic Arts, and Grand Theft Auto: San Andreas, from Take-Two Interactive.

"Nearly every new game released during the quarter exceeded our expectations, showing the overwhelming demand for video game products and how our new-and-used model helps us to grow market share and customer demand," a GameStop spokesman said in a statement. "Our initial projections for a strong holiday season seem to be justified by the exceptional acceptance of the video games released thus far in the season, and we are looking forward to an exciting few months and beyond."

GameStop expects earnings per share of 81 to 84 cents for the fourth quarter and $1.28 to $1.31 for the full year. A consensus of analysts has GameStop earnings pegged at 83 cents per share for the fourth quarter and $1.28 for the full year.

Although Barnes & Noble owns 59 percent of GameStop, that company's third-quarter profits were down to $7.6 million from last year's $10.2 million, or 10 cents per share from 14 cents per share. The company's third-quarter earnings from GameStop were reported to be $7.2 million, or 10 cents per share, which is up from 9 cents per share in the same period last year.

GameStop's stock at press time was trading at $22.91, off 2.5 percent from yesterday's close.