Take-Two Gains as Profit Tops Estimates on ‘BioShock’
Take-Two Interactive Software Inc. (TTWO) rose to the highest price in more than 23 months after its new “BioShock Infinite” video-game title and digital sales fueled profit that beat analysts’ estimates.
Take Two gained 0.9 percent to $16.54 at the close in New York, for the highest price since May 26, 2011. The publisher of the “Grand Theft Auto” games yesterday reported fourth-quarter profit excluding some items of 38 cents a share, ahead of the 23-cent average estimate, according to data compiled by Bloomberg.
The company has expanded its portfolio of hit games beyond “Grand Theft Auto” in the last two years to titles including “Borderlands” and “NBA 2K13,” helping it achieve a profitable year without the release of a new version of the shooter game. “BioShock Infinite,” introduced on March 26, sold more in its first month than previous versions, while digital sales almost tripled, the New York-based company said.
“They’re surprisingly good at digital, releasing downloadable content a month after launch to keep people playing games they might have been finished with,” said Michael Pachter, an analyst at Wedbush Securities Inc. in Los Angeles.
The growth in the company’s digital sales is welcomed by investors who have concerns about the industry downturn in sales of packaged titles, said Pachter, who has a buy rating on Take-Two shares.
Sales of digitally delivered games, a measure of video-game makers’ progress in shifting to Web-sold titles, jumped 192 percent compared with a year earlier, and accounted for 27 percent of overall sales, Take-Two said.
Total sales in the last quarter doubled to $303.1 million, after some adjustments, surpassing the average estimate of $279.9 million.
Net income from continuing operations totaled $21.2 million, or 23 cents a share, in the three months ended March 31, New York-based Take-Two said in a statement yesterday.
The company expects “solid profitability for the foreseeable future,” Chairman and Chief Executive Officer Strauss Zelnick said in an interview yesterday.
Take-Two forecast results this quarter that missed analysts’ estimates because of a delay announced earlier this year in the next “Grand Theft Auto” installment.
Revenue in the current first quarter will be $100 million to $125 million, Take-Two said. That’s less than the $198.9 million average of analysts’ estimates. The loss, adjusted for some items, will be 55 cents to 70 cents a share, wider than the 18-cent loss projected by analysts.
Take-Two had targeted an April release of “Grand Theft Auto 5,” the company said in October. In January, the release was moved back to September. Shipments of the title are likely to exceed the 15 million estimated by the company, Pachter said.
The current quarter won’t see any new titles, and instead will rely only on sales of add-on content and previously released games, Zelnick said.
“We have no frontline releases,” Zelnick said. “Our release schedules are less important than delivering quality titles, and we feel like we ticked all the boxes in the quarter.”
Take Two’s shares have gained 50 percent this year.
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