Published May 22, 2014
Video game retailer GameStop Corp (GME) reported a 7 percent rise in quarterly revenue, driven by growth in its mobile business and demand for the new games consoles that it sells to Sony Corp and Microsoft Corp.
GameStop's shares rose as much as 5 percent in extended trading on Thursday, after the company also reported a better-than-expected first-quarter profit.
GameStop forecast second-quarter earnings of 12-20 cents per share. Analysts are expecting earnings of 17 cents per share, according to Thomson Reuters I/B/E/S.
To combat falling video game software sales, GameStop has stepped up sales of used games and hardware in recent years, as well as expanding its range of digital and mobile products to include iOS and Android devices in some stores.
The Grapevine, Texas-based company said revenue in its hardware business rose 81 percent to $438 million for the quarter ended May 3. Revenue from its mobile and consumer electronics business doubled to $102.2 million.
Sales of new game software fell 20.4 percent, hurt by fewer launches of popular video game titles.
GameStop's results reflect a wider trend. According to a report by market research firm NPD, U.S. sales of video game hardware grew 47 percent during the first quarter ended March 31, while software sales were down 27 percent in February.
Total consumer spending on video gaming in the first quarter fell 1 percent to $4.6 billion from a year earlier, NPD said in the report, published on Wednesday. (http://link.reuters.com/vyp59v)
GameStop said its net profit rose to $68.0 million, or 59 cents per share, in its first quarter from $54.6 million, or 46 cents per share, a year earlier.
Revenue rose to $1.99 billion from $1.87 billion. Analysts on average had estimated a profit of 57 cents per share on revenue of $2.03 billion.
GameStop's shares closed at $36.88 on the New York Stock Exchange on Thursday.
(Reporting By Lehar Maan in Bangalore; Editing by Joyjeet Das and Robin Paxton)