Video game retailer GameStop (GME.US) announced that despite a decline in sales for the third quarter, it unexpectedly turned a profit. The stock price rose 7% in after-hours trading.

GameStop is one of the original "meme stocks." The company reported after the market closed on Tuesday that its third-quarter sales were $0.86 billion, a 20% decrease compared to the previous year, falling short of the market expectation of $0.888 billion; it recorded a profit of $17.4 million, reversing a loss of $3.1 million in the same period last year, with an adjusted earnings per share of $0.06, higher than the market's estimated loss of $0.03 per share.

At the end of the quarter, GameStop held a total of $4.616 billion in cash and securities, up from $0.929 billion in the same period last year.