Editor’s Note: Related tickers: GameStop Corp. (NYSE:GME), Best Buy Co., Inc. (NYSE:BBY), Microsoft Corporation (NASDAQ:MSFT)
GameStop Corp. (NYSE:GME) said Thursday that its first-quarter net income fell 25 percent as revenue declined, but results at the world’s biggest video game retailer surpassed Wall Street’s expectations. The company earned $54.6 million, or 46 cents per share, in the three months that ended on May 4. That’s down from $72.5 million, or 54 cents per share, in the same period a year earlier. Revenue fell 7 percent to $1.87 billion from $2 billion. Analysts, on average, were expecting earnings of 40 cents per share on revenue of $1.82 billion, according to a poll by FactSet.
GameStop CFO: Bartering Helps Fill the Gap Between New Consoles (WSJ)
Video game retailer GameStop Corp. (NYSE:GME) is used to operating in a cyclical business, but the company has spent the last few years in an extra-long cycle as it waits for new Xbox One and PlayStation 4 game consoles to come out later this year. New consoles typically drive a jump in business for the retailer, but in the meantime, the company has focused on increasing its pre-owned video game business, GameStop Corp. (NYSE:GME) chief financial officer Rob Lloyd said in a recent interview with CFO Journal. “Usually new consoles will get introduced over a span of a couple years and the cycle will last four or five years,” Mr. Lloyd said. “But the cycle we’re wrapping up now has been six or seven years, which is a challenge from an operating standpoint.”
GameStop Corp (GME) Announces Quarterly Dividend of $0.28 (MideastTime)
GameStop Corp. (NYSE:GME) declared a quarterly dividend on Thursday, May 23rd, AnalystRatings.Net reports. Investors of record on Tuesday, June 4th will be given a dividend of $0.275 per share on Wednesday, June 19th. This represents a $1.10 dividend on an annualized basis and a yield of 3.03%. A number of research firms have also recently commented on GameStop Corp. (NYSE:GME). Analysts at SunTrust reiterated a “buy” rating on shares of GameStop Corp. (NYSE:GME) in a research note to investors on Wednesday. They now have a $44.00 price target on the stock. On a related note, analysts at Sterne Agee set a $46.00 price target on shares of GameStop Corp. (NYSE:GME) in a research note to investors on Tuesday. They now have a “buy” rating on the stock. Finally, analysts at Wedbush reiterated an “outperform” rating on shares of GameStop Corp. (NYSE:GME) in a research note to investors on Monday. They now have a $49.00 price target on the stock, up previously from $33.00.
More Deadpool Pre-Order Bonuses Revealed (Explosion)
New pre-order bonuses have ben revealed for the upcoming Deadpool, the third person action game based on the Marvel Comics character of the same name. Pre-ordering the game from Best Buy Co., Inc. (NYSE:BBY) and digitally on Steam and GameStop Corp. (NYSE:GME) will net you some extra bonuses. All players pre-ordering the game from Best Buy Co., Inc. (NYSE:BBY) will receive a 5$ voucher for any Marvel comic book. Canadian gamers will also get an exclusive Deadpool poster not available anywhere else. All those who pro-order the game digitally from Steam and GameStop Corp. (NYSE:GME) will received the Merc With A Map DLC pack, featuring two new levels called GRT Plaza and Inside Tower which are going to be playable in the Deadpool Challenge Mode and Infinity Mode.
GameStop Has 2,500 Days to Live or Die (Fool)
GameStop Corp. (NYSE:GME) has recently benefited from the announcement that the Xbox One and PS4 PlayStation will support used games. This gives GameStop Corp. (NYSE:GME) time to not only generate easy revenues from its used game sells but also to figure out what to do with itself after the Internet likely replaces physical game sells as a source of video games. The current life expectancy of new physical game sells is around seven years, or 2,500 days, so if it looks ahead to the challenge of marketing Internet downloads, long-term prospects are good. If GameStop Corp. (NYSE:GME) rests on its laurels or old business model, it could be in for a rude shock. Right now, the company produces $500 million in free cash flow or a 10% cash flow relative to its market cap, the business is cheap, and there’s a 33% short position on the company that could turn into a short squeeze if this Christmas brings a successful launch of its new products.
GameStop Assures Consumers that PS4 and Xbox One Games Can Be Resold (GamePolitics)
While Microsoft Corporation (NASDAQ:MSFT) is being a little bit cagey about how it will handle used games on Xbox One, GameStop Corp. (NYSE:GME) is trying to reassure consumers that next-generation games will be able to be bought and sold. Speaking to Forbes, GameStop Corp. (NYSE:GME) president Tony Bartel explained why having the ability to buy and sell games is important as consoles transition. “Both Sony and Microsoft Corporation (NASDAQ:MSFT) have said games can be resold and that’s exactly what we anticipated. It’s a recognized way to make these games more affordable. All three new platforms understand that,” Bartel told Forbes.
