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Take-Two Raises Outlook on Strong Sales of New Game Titles
October, 29 2014

The Wall Street Journal/Maria Armental

Take-Two Interactive Software Inc. raised its outlook for the year based on strong early sales figures for several videogame titles released this month.

The company recently released NBA 2K15, "Borderlands: The Pre-Sequel," and” Sid Meier's Civilization: Beyond Earth," which it is banking on to drive results back into the black in the current quarter.

Preliminary sales figures have been promising, Chief Executive Strauss Zelnick said in an interview, leading the company to raise its earnings projection for the year by 25 cents a share. The company now expects a profit of $1.05 to $1.30 a share on revenue of $1.4 billion to $1.5 billion for the year that ends March 31.

Shares climbed nearly 7% after hours on the encouraging outlook.

For the current quarter, which includes the key holiday shopping season, the company expects a profit for that period of $1.35 to $1.45 a share on revenue of $745 million to $760 million, compared with the Wall Street consensus of $1.21 a share on $778.6 million.

Take-Two and its peers have looked to cash in from sustained demand for the latest generation of consoles, Sony Corp.'s PlayStation 4 and Microsoft Corp.'s Xbox One, released last November. But the New York game developer has only released a handful of games, and only one, "NBA 2K14," was on sale in the September quarter.

Its results in the year-earlier period got a big boost from the release of crime drama game "Grand Theft Auto V." Historically, Take-Two's fate has been tied to the releases of GTA, produced by its Rockstar Games unit.

Take-Two also said last quarter that it was pushing back the release of another shooting game for next-generation consoles, "Evolve," to February 2015. Meanwhile, "Battleborn," a multiplayer, first-person shooter being developed by the creators of the Borderlands franchise, is scheduled for release in 2016.

In all, Take-Two reported a loss for its second quarter ended Sept. 30 of $41.4 million, or 51 cents a share, narrowing from a year-earlier loss of $124.1 million, or $1.40 a share, which was dragged down by costs related to the game launch.

Excluding stock-based compensation, deferred net revenue and other items, the loss was 44 cents a share, versus a profit of $2.49 a year earlier.

Revenue, adjusting for stock-based compensation and other items, fell to $135.4 million from $1.27 billion a year earlier.

Take-Two had projected a loss of 60 cents to 70 cents a share on revenue between $95 million and $110 million.

Revenue from digitally-delivered content fell 15% to $89.8 million.