GameStop pops as Q1 revenue, profit rise and retailer authorizes $2 billion of stock buybacks

GameStop shares popped after-hours, as the company authorized a $2 billion stock buyback and posted a blockbuster fiscal first-quarter profit aided by unrealized gains on its options exposure to eBay stock. 

Here are the numbers from the retail trader favorite: 

• Adjusted earnings per share of $0.30, up from $0.17 a year earlier and above the $0.16 estimate of… precisely one analyst.

• Revenue of $835.3 million, up 14% from a year earlier.

• A $2 billion stock buyback authorization, which is equivalent to about one-fifth of the company’s market cap.

• A whopping $268 million unrealized gain because of its options exposure to eBay stock that it bought as it attempted to buy the online retailer. That led to a record quarterly net income of $389.6 million.

• The highest first-quarter operating income ever, at $143.3 million — a number not aided by the gain in eBay stock, but rather by higher revenue and improved margins. 

Shares rose 7.1% after-hours.

The buyback authorization is a particularly interesting development for GameStop, which less than two years ago issued billions of dollars’ worth of shares as it took advantage of surging stock prices. 

Of course, it’s worth noting that the buyback authorization can be used in piecemeal fashion for the next three years, so any potential buybacks don’t have to happen any time soon — or at all.