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November 8, 2012
06:06 EDTTTWOCarl Icahn raises stake in Take-Two to 10.68% from 9.57%
News For TTWO From The Last 14 Days
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November 23, 2015
10:18 EDTTTWOGameStop plunges on weaker than expected Q3 earnings
Shares of GameStop (GME) are plunging in morning trading after the company reported downbeat third quarter earnings on lower new software and hardware sales and delays in store openings. The company also provided guidance for the fourth quarter and reiterated its outlook for fiscal year 2015. WHAT'S NEW: Before the market open, GameStop reported Q3 adjusted earnings per share of 54c on revenue of $2.02B, below analysts' consensus estimates of 59c and $2.14B, respectively. GameStop added that global same-store sales for the quarter were down 1.1% year over year, with SSS down 1.7% in the United States and up 0.3% internationally. The company said foreign currency negatively impacted EPS by 2c and sales by about $100M and noted that it recorded $1.6M of one-time charges as a result of non-recurring acquisition-related costs. GameStop said new hardware sales declined 20.4%, while new software sales were down 9.3%; pre-owned sales were up 0.6%, the company said. Commenting on the quarter, Chief Executive Officer Paul Raines said that the company's results fell to the low end of its guidance range -- 53c-60c for EPS on SSS up 1% to up 4% -- due to "lower than expected new software and hardware sales and delays in Technology Brands store openings." The company provided an outlook for the fourth quarter, forecasting EPS of $2.12-$2.32, below analysts' estimates of $2.37, and SSS ranging from down 1% to up 6%. Despite the disappointing Q3 earnings and weak Q4 guidance, GameStop affirmed its FY15 EPS view of $3.66-$3.86 and added that it expects full year same store sales to grow 2%-6%. WHAT'S NOTABLE: Prior to the retailer's Q3 earnings report, Steven Russolillo of the Wall Street Journal's Ahead of the tape said that GameStop was "running out of lives" since it has experienced an increasingly challenging video game retail environment due to a rising number of shoppers buying games digitally. Russolillo noted that GameStop's resale business is still profitable and may pare losses somewhat. In addition, NPD Group reported earlier this month a 3% year over year decline in game software retail sales in the U.S. in October. The loss came even despite the major launch of Microsoft's (MSFT) flagship title "Halo 5: Guardians." STREET RESEARCH: Piper Jaffray analyst Michael J. Olson said that GameStop is "clearly" seeing an impact from increasing digital software sales, but that the firm expects digital expansion to ease during the holiday quarter. Olson added that the video game industry is currently in the "renewed growth phase" and that he expects trends in the sector to be strong heading into 2016. The analyst maintained an Overweight rating and $57 price target on the company's stock. PRICE ACTION: In morning trading, GameStop slipped 13.93% to $33.89. The company will hold its earnings conference call at 11am. OTHERS TO WATCH: Video game makers are also lower this morning. Shares of Electronic Arts (EA) are down 2.26%, Take Two Interactive (TTWO) is down 0.84% and Activision Blizzard is down 1.55%.

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