Take-Two Posts Surprise 3Q Profit; 4Q Targets Sharply Raised—Wall Street Journal
September, 3 2010
Take-Two Interactive Software Inc. (TTWO) swung to a surprise fiscal third-quarter profit--its second in a row after a string of losses--as the videogame maker posted sharply higher sales, primarily due to the strong performance of "Red Dead Redemption."
The company also dramatically lifted its targets for the fourth quarter, now projecting earnings of 20 cents to 30 cents a share on revenue of $270 million to $320 million, an improvement of 40 cents and $70 million, respectively.
The third-quarter's results easily topped the company's June targets, with Chief Executive Ben Feder saying the success of "Red Dead Redemption" has shown the company's teams can produce "multiple mega-hit franchises." The action-adventure Western video game has sold more than 6.9 million units worldwide since its launch in May.
Feder added the company is also making strides in the Asian market and within online distribution. Digitally delivered content continued to be a meaningful component of Take-Two's sales, according to the company Thursday.
The improved performance in recent quarters contrasts sharply with Take-Two's woes during the economic slowdown. Take-Two, which publishes the popular "Grand Theft Auto" series of games, struggled with delay of its games and a difficult retail environment, leading it to restructure some corporate departments.
For the quarter ended July 31, Take-Two posted a profit of $5.9 million, or 7 cents a share, compared with a year-earlier loss of $56.5 million, or 73 cents a share. The latest quarter had 21 cents of charges. Revenue more than tripled to $354.1 million from $94.9 million.
In June, Take-Two predicted a loss of 10 cents to 20 cents on revenue of $250 million to $300 million, a view that easily topped analysts' then-expectations.
Gross margin jumped to 32.1% from 19% on the sales surge.
Take-Two's shares closed at $8.85. The stock is down nearly 20% the past year