GameStop Corp (NYSE: GME) jumped roughly 10% in extended trading after reporting better-than-expected results for its fiscal second quarter.
GameStop second-quarter financial highlights
- Lost $2.8 million versus the year-ago $108.7 million
- Per-share loss also narrowed from 36 cents to 1 cent
- Adjusted loss printed at 3 cents on a per-share basis
- Revenue increased 2.0% year-on-year to $1.16 billion
- Consensus was 14 cents loss on $1.14 billion revenue
GameStop ended its second quarter with nearly $1.20 billion worth of cash and equivalents and little debt.
Despite a healthy balance sheet, though, Wedbush rates this meme stock at “underperform” on concerns that mobile and digital gaming pose a material threat for its business. The firm’s $6.0 price target suggests it could crash a whopping 70% from here.
What else was noteworthy in GameStop’s earnings report?
GameStop Corp continued to lower its expenses in the recently concluded quarter, as per the press release.
At $322.5 million, its selling, general, and administrative costs were down about 17% on a year-over-year basis. In Q2, the gaming merchandise retailer saw $4.3 million of transaction costs attributed to its restructuring initiatives in Europe.
Earlier this year, GameStop fired Matt Furlong as its Chief Executive and named Mark Robinson as General Manager. It also elected Ryan Cohen – an activist investor its Executive Chairman in June as Invezz reported here.
Including the after-hours price action, GameStop stock is up about 30% versus its year-to-date low.
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