Take-Two Interactive Software Inc., publisher of the “Grand Theft Auto” video games, fell as much as 7.5 percent after reporting first-quarter results and a full-year outlook that fell below analysts’ estimates.
Take-Two fell 6.4 percent to $8.22 at 12:26 p.m. and traded as low as $8.12, marking the biggest intraday drop since November. The stock is at lows not seen since August 2010.
Like most video-game publishers, Take-Two has struggled to build momentum in its packaged-goods business. “Spec Ops 3” and “Max Payne 3” sales were below expectations, Chairman and Chief Executive Officer Strauss Zelnick said in an interview. The company is delivering fewer new titles, and has relied on reviews to pique interest, he said. “Max Payne” sales were particularly disappointing in light of its high scores.
“There’s no doubt the consumer is becoming more discerning with their dollars,” Zelnick said. “I’m disappointed but encouraged by our upcoming release schedule.
Competitor Electronic Arts Inc., the second-largest U.S. video-game publisher, reported fiscal first-quarter sales yesterday that fell 6.3 percent.
Take Two, based in New York, reported a first-quarter net loss of $110.8 million, or $1.30 a share, compared with loss of $8.71 million, or 11 cents, a year earlier, according to a statement yesterday. Excluding some items, the loss was $1.16 a share in the period ended June 30, almost double the average 66-cent estimate of analysts.
Sales fell 32 percent to $226.1 million and were below the $255.7 million average of 15 estimates compiled by Bloomberg.
Revenue from digitally delivered content grew 33 percent year-over-year and accounted for 14 percent of net revenue, driven by ‘‘Sid Meier’s Civilization” franchise and “Grand Theft Auto.” During the quarter, Take-Two also began testing service for an “NBA 2K” online game in China.
For the year, Take-Two forecasts profit of $1.75 to $2 a share, excluding items, below the $2.25-a-share average estimate of 15 analysts. Its forecast for sales of $1.7 billion to $1.8 billion was below the average estimate of $1.82 billion.