GameStop Corp, on Thursday reported its profits surged for its second quarter thanks to the revenue of the retailer of video games jumping by 25%.
That surge in revenues was credited for the most part to strong demand in consoles such as PlayStation 4 and Xbox One. Both revenues and earnings for the recently ended quarter were ahead of expectations on Wall Street.
The company looking ahead has a strong outlook for its ongoing quarter. The retailer also reaffirmed its guidance for the full year, which helped send shares up by more than 7% in extended after hours trading.
GameStop said its revenues for the recently ended quarter reflect the high demand in the market for the Sony PlayStation 4 and the Xbox One by Microsoft, as new sales of hardware soared by more than 125%.
The next generation consoles released during last fall were a boon to the industry of hardcore gaming as the majority of companies had been struggling to stay up with the constant consumer taste changes, as gamers started changing to less expensive mobile and social games on the web.
Sales of new software were up 15% thanks to the strong performance of the newly released titles like Mario Kart 8 and Watch Dogs.
Sales at the video retailer based in Grapevine, Texas for quarter were up by 25% to end the period at $1.73 billion from the same quarter last year of $1.38 billion.
Analysts were expecting revenues for the quarter to be $1.65 billion.
Sales at comparable stores during the quarter were up 22%.
The second quarter GameStop profit was up ending at $24.6 million equal to 22 cents a share from the $10.5 million equal to 9 cents a share for the same period a year ago.
Analysts had expected 18 cents a share earnings during the quarter.
GameStop said it expects sales at same stores to grow by between 1% and 5% and for earnings to be between 58 cents and 64 cents a share. Analysts are projecting at this time, earning of 57 cents a share during the ongoing quarter.
Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.