GME Stock Drops on GameStop Earnings Miss

by Christopher Freeburn | March 27, 2014 10:06 am

GME Stock Drops on GameStop Earnings Miss

On Thursday, video-game retailer GameStop posted weaker-than-expected quarterly results[1]. GME stock tumbled more than 7% on the news.

GameStop 300x225 GME Stock Drops on GameStop Earnings Miss[2]
Source: Flickr[3]

GME stock dropped after GameStop reported a net profit of $220.5 million during its fiscal fourth quarter. That was down from $261.1 million in the prior-year period. EPS came in at $1.89, disappointing analysts who had forecast earnings of $1.92 per share, Reuters noted.

Quarterly revenue of $3.68 billion — up from $3.56 billion in the year-ago period — also missed the $3.79 billion that Wall Street had anticipated.

The company is facing pressure both from rising online video game sales and from discount retail chains like Walmart (WMT[4]), which sells video games and recently announced plans to allow used game trade-ins[5].

GameStop also said that it planned to shut down about 2% of its existing stores in 2014.

GME stock closed at $38.90 per share on Wednesday. Over the past 12 months, GME stock has climbed more than 45%.

Endnotes:
  1. weaker-than-expected quarterly results: http://www.reuters.com/article/2014/03/27/gamestop-results-idUSL4N0MO3IA20140327
  2. [Image]: http://investorplace.com/wp-content/uploads/2011/11/GameStop.jpg
  3. Flickr: http://www.flickr.com/photos/moe/2574430333/
  4. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  5. recently announced plans to allow used game trade-ins: http://investorplace.com/2014/03/gme-stock-gamestop-walmart/#.UzQvftxhOf0

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