NEW YORK (

TheStreet

) --

GameStop

(GME) - Get Report

is gaining after it reported better-than-expected fourth-quarter profit and released a 2010 outlook that could top Wall Street's forecasts.

During the quarter, Gamestop earned $215.9 million, or $1.29 a share, a 7% decline compared with $232.3 million, or $1.39, in the year-ago period. Analysts expected the video game retailer to earn $1.28 a share.

Gamestop's profit was weighed down by weak same-store sales during the all-important holiday season, which tumbled 7.9%. Still, revenue increased to $3.52 billion from $3.49 billion in the prior year.

But looking ahead, GameStop foresees full-year earnings in the range of $2.58 to $2.68 a share, significantly higher than Wall Street's forecast of $2.26 a share.

For the first quarter, the company said same store sales will fall 3% to break even, with earnings of 46 cents to 48 cents a share, in-line with analysts' expectations.

Shares of GameStop are advancing 7.7% to $21.38 in pre-market trading.

-- Reported by Jeanine Poggi in New York.

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