GameStop Guidance Comes Up Short

Second-quarter sales rose to $415.9 million from $345.6 million.
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Video game and software seller

GameStop

(GME) - Get Report

said second-quarter revenue rose 20.3% from a year ago, while

Sony's

PlayStation Portable helped drive higher same-store sales.

Investors, though, were worried about the company's outlook, which pegged profits below analysts' views. Shares of GameStop were down 35 cents, or 1.2%, to $29.10.

For the third quarter, GameStop expects comp sales to fall 8% to 10%, which the company attributed to tough comparisons with the previous year. Earnings should be 18 cents to 20 cents a share.

The company projected a full-year profit of $1.30 to $1.40, without taking into consideration the planned merger with

Electronics Boutique

(ELBO)

. Analysts expect earnings of 21 cents for the third quarter and $1.42 for the year.

GameStop said second-quarter sales rose to $415.9 million from $345.6 million in the prior year. Video-game software sales increased by 16%, with strength in titles such as "NCAA Football 2006," "Star Wars Episode III: Revenge of the Sith" and "Pokemon Emerald."

Same-store sales rose 6.2% in the quarter, assisted by sales of Sony's handheld PSP game system, the Grapevine, Texas, company said Thursday.

Second-quarter earnings totaled $7.9 million, or 14 cents a share, compared with $7.7 million, or 13 cents a share, in the prior-year quarter. The latest quarter includes a $1.1 million writeoff of GameStop's used "Grand Theft Auto: San Andreas" inventory, due to the "adults only" rating that was put on the game and the pulling of the title from stores.

The company's earnings fell a penny short of Wall Street's consensus estimate.