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GameStop posts big 3Q loss on impairment charge

GRAPEVINE, Texas (AP) -- Video game retailer GameStop Corp. said Thursday that it took a large loss in the third quarter because of a charge related to its stock price with lower sales compared to last year.

GameStop took almost $679 million in goodwill and other impairment charges during the quarter because its share price fell during the previous quarter. Its stock lost 29 percent of its value during the second quarter on concerns about weakening profits and sales. GameStop shares have recovered since then.

In the quarter ended Oct. 27 the company lost $624.3 million, or $5.08 per share, compared with a profit of $53.9 million, or 39 cents per share, a year ago .If the impairment charges and other one-time items are excluded, GameStop made 38 cents per share in the recent quarter.

Revenue fell 9 percent to $1.77 billion.

Analysts expected 32 cents per share and $1.79 billion in revenue, according to FactSet. GameStop shares rose 78 cents, or 3.3 percent, to $24.26 in midday trading.

GameStop said sales of new and used software and new hardware fell. It also said more big-name games were released during the third quarter of 2011 than in the recent quarter. Sales at stores open at least a year fell 8.3 percent. Those sales are considered an important measurement of retailer health because they leave out results from stores that opened or closed in the last 12 months.

The company said it expects net income of $2.07 to $2.27 per share during the fourth quarter, which covers the holiday shopping season. GameStop backed its full-year estimate, which calls for net income of $3.10 to $3.30 per share, excluding one-time items.

Analysts expect the company to earn $2.16 per share in the fourth quarter and $3.13 per share for the full year.

GameStop also said it added $500 million to its stock repurchase authorization. The company has $242 million remaining on its previous stock buyback program.