Post by Segaman on Aug 25, 2007 14:44:09 GMT -5
Optimism around GameStop's future mounted Friday, a day after the company announced stellar earnings. The game retailer looks to benefit from a strong upcoming release schedule in the midst of a console upgrade cycle, and hit games from Microsoft and Activision.
Shares of GameStop rose $1.98, or 4.2%, to $49.43, at the close on Friday, after First Albany analyst William Lennan upgraded the company to "strong buy" from "buy." Lennan said the company has the potential to post positive numbers in each of the next six quarters.
GameStop is coming off a strong second-quarter earnings release. On Thursday, Game Stop announced second-quarter earnings per share of 14 cents, well above analyst expectations of 9 cents per share.
The upside was driven by a slew of blockbuster releases. Titles like Activision's Guitar Hero II and Microsoft's Forza Motorsport 2 helped drive GameStop's new game sales to $494.2 million from $330.7 million a year ago.
Lennan said Friday the company should be able to duplicate strong results in its current quarter. "In the third quarter, the company will benefit from the launch of numerous highly-anticipated games, including the Microsoft Corporation's Halo 3," said Lennan.
GameStop also benefits from industry-wide growth. Market research firm NPD Group announced earlier this week that July game sales rocketed as compared to a year ago. The firm said video game and console sales jumped 37.0%, to $925.5 million in July, from $675.6 million a year ago. Sales have picked up as gamers upgrade to new consoles released by Nintendo, Sony, and Microsoft.
The NPD figures also showed that Nintendo continues to have the surprise success of the next-generation console wars. Its Wii sold 425,000 units in July. Microsoft's XBOX 360 sold 170,000 and PlayStation 3 sold 159,000.
www.forbes.com/markets/2007/08/24/gamestop-first-closer-markets-equity-cx_af_ra_0824markets41.html
Shares of GameStop rose $1.98, or 4.2%, to $49.43, at the close on Friday, after First Albany analyst William Lennan upgraded the company to "strong buy" from "buy." Lennan said the company has the potential to post positive numbers in each of the next six quarters.
GameStop is coming off a strong second-quarter earnings release. On Thursday, Game Stop announced second-quarter earnings per share of 14 cents, well above analyst expectations of 9 cents per share.
The upside was driven by a slew of blockbuster releases. Titles like Activision's Guitar Hero II and Microsoft's Forza Motorsport 2 helped drive GameStop's new game sales to $494.2 million from $330.7 million a year ago.
Lennan said Friday the company should be able to duplicate strong results in its current quarter. "In the third quarter, the company will benefit from the launch of numerous highly-anticipated games, including the Microsoft Corporation's Halo 3," said Lennan.
GameStop also benefits from industry-wide growth. Market research firm NPD Group announced earlier this week that July game sales rocketed as compared to a year ago. The firm said video game and console sales jumped 37.0%, to $925.5 million in July, from $675.6 million a year ago. Sales have picked up as gamers upgrade to new consoles released by Nintendo, Sony, and Microsoft.
The NPD figures also showed that Nintendo continues to have the surprise success of the next-generation console wars. Its Wii sold 425,000 units in July. Microsoft's XBOX 360 sold 170,000 and PlayStation 3 sold 159,000.
www.forbes.com/markets/2007/08/24/gamestop-first-closer-markets-equity-cx_af_ra_0824markets41.html
