GameStop, the largest U.S. video game retailer, on Tuesday gave a disappointing profit outlook for the holiday season that overshadowed strong third-quarter results, sending its stock down nearly 10 percent.
The shares slipped after GameStop said its profit in the fourth quarter, which includes the peak holiday shopping period, would be 95 cents to 97 cents a share. That's higher than the same period a year ago, but short of analysts' expectation of $1.01, according to Reuters Estimates.
For the third quarter, net income rose to $52 million, or 31 cents a share, from $13.6 million, or 9 cents a share a year earlier. The profit beat Wall Street views of 23 cents a share, powered by sales of games such as Halo 3 and Madden NFL '08, and Guitar Hero II.
Revenue in the period rose to $1.61 billion from $1.01 billion. New video game software sales rose 59 percent in the quarter, while new hardware sales jumped 149 percent.
GameStop, whose rivals include mainstream retailers like Wal-Mart and Best Buy, said it opened 181 new stores in the quarter and operates over 5,000 globally.
Shares of GameStop fell early to a low of $47.61 on the New York Stock Exchange. The stock is still up about 90 percent so far this year as the company secured its position as the last remaining major specialty chain in the $30 billion video game industry.
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