GameStop (GME), the video game retailer, saw its shares surge 5.31% in pre-market trading on Wednesday. This significant price movement came after the company reported an unexpected profit for the third quarter of 2024, despite a steep decline in sales.

The video game retailer's Q3 earnings results defied Wall Street expectations. While net sales dropped 20% year-over-year to $860.3 million, missing estimates, GameStop surprisingly swung to a net income of $17.4 million, compared to a net loss of $3.1 million in the same period last year. On an adjusted basis, the company earned 6 cents per share, beating analysts' projections of a 3-cent loss.

GameStop attributed the unexpected profit to cost-cutting measures and a tighter focus on higher-margin products. The company also disclosed that it completed an "at-the-market" equity offering program during the quarter, selling 20 million common shares for around $400 million. However, GameStop stated that it does not anticipate any further stock offerings during the current fiscal year.