GameStop stock goes down, sales go down and dividend eliminated

Shares of GameStop fell nearly 14% on Tuesday after the retailer announced that it would eliminate its dividend as video game sales continued to drop and put pressure on its business.

Surprisingly, GameStop announced a net profit in the last quarter, but its earnings were below Wall Street's expectations.

With sales expected to continue to decline, the company announced that it will eliminate its quarterly dividend, effective immediately, to save about $ 157 million a year.

The company's net income fell to $ 6.8 million, or 7 cents a share, in the first quarter, from $ 28.2 million, or 28 cents a share, in the same period a year earlier. Net sales also declined to $ 1.55 billion from $ 1.79 billion for the same period last year.

Analysts surveyed by Refinitiv were expecting a loss of 3 cents per share for a $ 1.64 billion business figure.

GameStop said it expects sales for the year 2019 to be between 5% and 10%. The retailer faces declining sales of video games and consoles in stores, as well as declining profits due to changing preferences for downloadable video games and streaming.

The company's shares were down 38% since Tuesday's close, after stocks tumbled at the end of January, when the company halted its efforts to sell.