Take-Two's Third-Quarter Profit Beats Estimates With Sports Video Games
Take-Two Interactive Software Inc., the publisher of “Grand Theft Auto” video games, beat analysts’ estimates for third-quarter profit with sales of its basketball game. The company raised its fourth-quarter forecast.
Profit excluding some costs rose to $49.5 million, or 52 cents a share, from $49.2 million, or 53 cents, a year earlier, Take-Two said in a statement. That exceeded the 34-cent average of 10 analysts surveyed by Bloomberg. The company had forecast profit of 25 cents to 35 cents a share on that basis.
Sales fell 7.2 percent to $334.3 million, beating analysts’ estimates of $312.6 million.
“We will have a lot of work to do,” Take-Two Chief Executive Officer Strauss Zelnick said in an interview. “That said, I think the release schedule looks great.”
Take-Two jumped as much as 6.6 percent to $15.50 in late trading after the results were announced. The shares advanced 19 cents to $14.54 at 4 p.m. New York time on the Nasdaq Stock Market, their highest price since October 2008, and have gained 19 percent this year.
Take-Two, based in New York, may be reversing a history of annual losses by building a strong portfolio of company-owned games, Arvind Bhatia, an analyst with Sterne Agee in Dallas, said in a Feb. 3 note to investors. He has a “buy” rating on the shares.
“Our sum-of-the-parts valuation yields values in the $17- plus range and is based on the company’s strong game portfolio,” including “L.A. Noire” and “Agent,” Bhatia wrote.
New Releases
“L.A. Noire” is slated for May 17 release. Take-Two hasn’t said when it will release “Agent,” an espionage game announced in June 2009.
Take-Two’s 2K Sports division shipped more than 4 million units of its “NBA 2K11” game worldwide over the holiday period, according to the statement. The company said it also continues to benefit from add-on packs for its “Red Dead Redemption” Western shooter, which shipped more than 8 million copies since its May 2010 release.
For the current quarter, Take-Two forecast a loss of 40 cents to 45 cents a share, excluding items, on revenue of $130 million to $150 million. That compares to an estimated loss of 51 cents a share on revenue of $136.3 million, according to 12 analysts surveyed by Bloomberg.
In October, Take-Two announced a change to a fiscal year ending on March 31 from Oct. 31.
To contact the reporter on this story: Cliff Edwards in San Francisco at Cedwards28@bloomberg.net.
To contact the editor responsible for this story: Anthony Palazzo in Los Angeles at apalazzo@bloomberg.net
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