GameStop is surging after earnings beat expectations

Gamestop

(Flickr/Steve Wright Jr. )

GameStop shares jumped as much as 7% in early trading on Friday after the company reported a big earnings beat.

On Thursday evening, the consumer electronics retailer posted adjusted earnings per share of $0.68, a 15% year-over-year increase and a beat on estimates for $0.58, according to Bloomberg.

GameStop reported sales of $2.06 billion, an 8.1% increase in constant currency, beating estimates for $2.01 billion.

Same-store sales were up 8.6% in the quarter.

Sales on used games fell 3% year-over-year, below expectations, and the "biggest negative in the report and still a big question mark for the year," according to Pacific Crest analysts, writing in a note.

GameStop raised its diluted EPS guidance for the full year from $3.60-$3.80 to $3.63-$3.83, due to a reduction in shares outstanding.

The company repurchased $46.4 million worth of its shares in the first quarter; it has $400.9 million remaining on its share-repurchase authorization.

CEO Paul Raines said in a statement: "Our first quarter results exceeded expectations, displaying our market leadership and our ability to drive and leverage our core video game business and expand our diversified businesses to deliver healthy profits and solid top-line growth."

Here's a chart showing the pop in shares on Friday morning:

Screen Shot 2015 05 29 at 10.10.32 AM

(Google Finance)

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