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GameStop Beats on Both Top and Bottom Lines

Tuesday - 4/2/2013, 12:36pm  ET

GameStop reported earnings on March 28. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 2 (Q4), GameStop beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue was unchanged. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased significantly.

Margins grew across the board.

Revenue details
GameStop reported revenue of $3.56 billion. The 19 analysts polled by S&P Capital IQ expected a top line of $3.45 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $2.16. The 20 earnings estimates compiled by S&P Capital IQ averaged $2.09 per share. Non-GAAP EPS of $2.16 for Q4 were 25% higher than the prior-year quarter's $1.73 per share. GAAP EPS of $2.15 for Q4 were 69% higher than the prior-year quarter's $1.27 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 27.4%, 100 basis points better than the prior-year quarter. Operating margin was 11.6%, 90 basis points better than the prior-year quarter. Net margin was 7.3%, 240 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.83 billion. On the bottom line, the average EPS estimate is $0.41.

Next year's average estimate for revenue is $8.62 billion. The average EPS estimate is $3.20.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 2,842 members out of 3,195 rating the stock outperform, and 353 members rating it underperform. Among 753 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 651 give GameStop a green thumbs-up, and 102 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on GameStop is outperform, with an average price target of $27.77.

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This article was originally published as GameStop Beats on Both Top and Bottom Lineson Fool.com

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