Earnings Preview: GameStop

| About: GameStop Corp. (GME)

GameStop (NYSE:GME) is scheduled to report its Q2 2012 results on Aug. 16, 2012, before the market opens. The Street expects EPS and revenue of $0.15 and $1.62 billion, respectively.

In this article I will recap GME's historical results, its latest EPS estimates vs. surprises, and the latest news from the company.

GameStop Corp. Revenue and Net Income History

GME Revenue TTM Chart

Recent EPS: Actual Vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter it reported $0.54 EPS, in line with analyst estimates.

GameStop Corp. EPS Historical Results vs Estimates

The consensus EPS estimate is $0.15 based on 18 analysts' estimates, down from $0.22 a year ago. Revenue estimates are $1.62 billion, down from $1.74 billion a year ago. The median analyst target price for the stock is $25.00.

Average Recommendation: Overweight

Source: MarketWatch.

Analyst Upgrades and Downgrades

  • On May 18, 2012, Ascendiant Capital Markets reiterated a Buy rating for the company.
  • On May 17, 2012, Caris & Company downgraded the company from Buy to Average.
  • On April 10, 2012, Needham downgraded the company from Buy to Hold.

Latest News

  • On Aug. 3, 2012, GameStop partnered with Activision to "enhance your Skylanders Giants experience. Exclusively at GameStop, Skylanders Giants fans can pre-order the Golden Dragonfire Cannon Battle Pack that expands your Skylanders Giants game play with new battle arenas and figures. This limited edition battle pack features the Golden Cannon and unlocks an exclusive in-game battle arena."
  • On July 26, 2012, GameStop announced the appointment of Thomas N. Kelly to its board of directors. Kelly brings with him extensive board experience as well as more than 25 years of leadership in the communications and wireless industries.
  • On June 5, 2012, GameStop customers are staying ahead of the game with the latest announcements from E3 and can now pre-order the hottest games of the show in stores and online at GameStop.com.
  • On June 1, 2012, GameStop announced the addition of PlayStation Network downloadable content from Sony Computer Entertainment Europe to its European and Australian store base. This digital option will be available at more than 1,600 store locations in Australia, New Zealand, France, Italy, Spain, Germany, Austria, and Switzerland. Customers in those countries will have the ability to purchase downloadable content with any form of payment including trade credits, gift cards, and cash. Last year, GameStop returned more than $ 1.2 billion in trade credits for pre-owned games, and those customers are eligible to apply their trade credits toward any game purchase, including downloadable content.
  • On May 25, 2012, GameStop announced that it "now carries a selection of Android tablets in more than 1,600 U.S. stores, just in time for the holiday weekend. With models like the Acer Iconia Tab A200 (only $299.99 through June 2), ASUS TF300T ($399.99) and Toshiba Excite 10 ($449.99), consumers are sure to find a tablet that's ideal for gaming and more."
  • On May 17, 2012, GameStop announced that the board of directors declared a quarterly cash dividend of $0.15 per common share payable on June 12, 2012, to shareholders of record at the close of business on May 29, 2012.
  • On May 17, 2012, GameStop announced that for the second quarter of 2012 it expects comparable store sales to range from -11.0% to -5.0%, and diluted earnings per share (NYSEARCA:EPS) to range from $0.10 to $0.18. The company maintains its previously announced fiscal 2012 EPS guidance range of $3.10 to $3.30. Comparable-store sales are expected to range from -5.0% to flat in fiscal 2012.
  • On March 22, 2012, GameStop announced that for the first quarter of 2012 it expects total sales of -9.5% to -7.5%, comparable-store sales of -9.0% to -7.5%, and diluted earnings per share of $0.52 to $0.55. For fiscal 2012, it expects total sales of 1.0% to 5.0%, comparable-store sales of -1.5% to 2.0% , and diluted EPS of $3.10 to $3.30.

Technical Overview

The stock has a market capitalization of $2.19 billion and is currently trading at $16.83, with a 52-week range of $15.32 to $26.66. The stock's year-to-date performance has been -29.23%. It is currently trading above the 20-day SMA, but below the 50-day and 200-day SMAs.

Data sourced from Yahoo Finance, Google Finance, MarketWatch, Finviz, and Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.