GameStop Corp (NYSE:GME)’s stock dived around 9% in extended trading on Wednesday after the video game retailer’s mixed second-quarter earnings report. GameStop surpassed revenue predictions but did not come up to scratch on earnings.
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According to MarketWatch, the company’s shares remained “in a holding pattern for about an hour before plunging as much as 10% following a brief conference call in which GameStop’s new chief executive, Matt Furlong, read off a press release and took no questions.”
The earnings report revealed how GameStop had a net loss of $61.6 million –equivalent to 85 cents a share– “compared with a net loss of $111.3 million, or $1.71 a share, in the year-ago quarter.”
“The company’s adjusted net loss was $55 million, or 76 cents a share,” while revenue rose 26% to $1.18 billion from $942 million a year ago.
Analysts were expecting a net loss of 67 cents a share with revenue hitting $1.12 billion.
Matt Furlong said on a conference call after the earnings announcement that, for investors, revenue is the key indicator of GameStop’s business performance.
Still, the earnings report depicts a less unfavorable debt and a more positive growth from a year ago, when the company reported a loss of $1.40 a share, according to MarketWatch.
In the short conference call with investors, Furlong gave information on the company’s overall strategy upon the lukewarm Q2 earnings.
“We now have unified leadership fully focused on two long-term goals - delighting customers and delivering value for stockholders …. We are focused on positioning GameStop to scale while obsessing over competitive pricing, expansive selection, and fast shipping.”
As reported by CNBC, the GameStop stock frenzy led to wild fluctuations in value. “Although it’s far below its 52-week high, GameStop’s market cap has swelled to $14.28 billion, even though the company is still posting quarterly losses.”
In late January, the frenzy around GameStop stock had lost strength, when it lost around 40% on a Tuesday after soaring 400% the previous week. The stock got to plunge by nearly 60%, trading at $92 per share after reaching an all-time high of $347.
The company is currently betting on the e-commerce business, as it announced the signing of a lease for a 530,000-square-foot facility center in Reno, Nevada. With it, GameStop is set to improve the delivery of online orders.