GameStop Corp.( ) is scheduled to release its second quarter financial results before the market open on Thursday, August 20, 2009. Analysts currently expect the company to report earnings of 29 cents per share on revenue of $1.77 billion. In the year ago period, GameStop reported earnings of 34 cents a share on revenue of $1.80 billion.

GameStop Corp. is the world's largest video game retailer. It sells new and used video game hardware; video game software; video game accessories, including controllers, memory cards, and other add-ons; PC entertainment software etc.  As of January 31, 2009, GameStop Corp. operated 6,207 stores primarily under the names GameStop and EB Games that are located in regional shopping malls and strip centers in the United States, Australia, Canada, and Europe.

The company's net income increased 13% to $70.4 million, or 42 cents a share, compared with earnings of $62.1 million, or 37 cents a share, in the year ago period. Revenue climbed 9% to $1.98 billion. Same-store sales slipped by 1.5% during the period. Gross margin rose to 27.4% from 26.1%. Analysts on average had projected earnings of 41 cents a share on revenue of $1.98 billion.

In May, the company said that it expects to report earnings of 28 cents to 33 cents a share, compared with 34 cents a share in the year-earlier period. Comparable-store sales for the quarter are expected to decline between 8% and 11%. GME also reaffirmed its full year 2009 earnings guidance to a range of $2.83 to $2.93 a share, representing a 18% to 22% increase over fiscal 2008. Full year comparable store sales are now expected to range from flat to +2%.

GameStop is the dominant player in the used game business. Used product sales grew a robust 32% in first quarter and sales of used games accounted for nearly 28% of the company's revenue base for the period, compared to 23% for the same period last year. Thanks to the impressive margin, used game happens to be one of the most rewarding businesses around. Used game sales also accounted for 48% of the company's total gross profit in the recent quarter. However, the video game sector hasn't escaped recession unscathed. Last week, market researcher NPD Group reported a 29 percent industry-wide drop in sales of game hardware, software and accessories, a deeper decline than analysts were expecting.

However, GameStop has continued with its aggressive worldwide expansion plans and expects to open between 75 and 100 stores with a goal of around 400 new stores for the year. During the quarter, GameStop opened 114 new stores and expects to open between 75 and 100 stores in the current quarter with a goal of around 400 new stores for the year.

Shares of the company are currently trading at 9 times consensus 2011 EPS estimates. In terms of stock performance, GameStop shares have gained 9% since the beginning of the year. On Wednesday, shares of the company rose 74 cents or 3.02% to $25.28.

Disclosure: Author doesn’t own any of the stocks mentioned here.